NSK BEARING S EUROPE LTD., et al ., Plaintiffs,

v. THE UNITE D STATE S,

Def endant, a nd THE T IMK

EN COMP ANY, Def endant- I nterve nor. Slip Op. 10–118 UNITED STAT ES COURT OF INTERNATIONAL TRADE

Before: Tim othy C. Stanceu, Judge Court No. 10- 00289

OP INION AND ORDER [Denying pla intiffs’ motion for injunction ag ainst liquidation of entries subject to administrative revie w of a

ntidumping duty

order ] Dated: Oc tober 15, 2010 Crowell & Moring LLP (

Matthew P. Jaffe , Alexande r H. Schae fer , Robert A. Lipstein ) for plaintiffs NSK Be aring s Europe Ltd., NSK Europe Ltd., and NSK Corporation. Tony W est , Assistant Attorney

Gene ral, JeanneE. Davidson , Direc tor, Patricia M. McCarthy , Assistant Director , Commercial L itigation B ranc h, Civil Division, United St ates Depa rtment of Just ice (

L. Misha Preheim ); Shana Hofstetter , Offic e of the Chief Counsel for I mport Administration, United St ates De partment of Commerc e, of c ounsel, for de fenda nt. Stewart and Stewart

( Gee rt M. De Pre

st , TerenceP. Stewart , W illiam A. Fennell , and Lane S. Hurewitz ) for

defe ndant-interve nor. Stanceu, Judge : Plainti ffs NSK B ear ings Eur ope L td., NSK Europe Ltd., and NSK Corporation (c ollectively , “NSK” or “plaintiffs” ) broug ht this action to contest a final deter mination of the U.S. Depa rtment of Commerce (“Commerc e” or the “De partment” ), published as Ball Bearings & Parts Thereof From France, G ermany , Italy, Japan, &the UnitedCourt No. 10- 00289 P age 2

Kingdom: Final Results of Anti dumping Duty Administrative Rev iews, Final Results of ChangedCircumstances Re view, &Rev ocation of an Order in Part , 75 Fe d. Reg . 53,661 (Sept. 1, 2010) (“F inal Results”). Plaintiffs bring a sing le claim cha lleng ing a s unlawful the use of the Depa rtment’s “zeroing ” methodolog y to calculate a we ighte d-ave rag e dumping marg in for NSK Be aring s Europe Ltd., under whic h U.S. sales of ba ll bearing s and par ts thereof from the United King dom (“subjec t mercha ndise”) a t prices a bove norma l value ar e dee med to have individual dumping mar g ins of zero rathe r than ne g ative mar g ins. Compl. ¶¶ 5, 10-13. Plaintiffs claim 1 that the “De partment’s zeroingmethodology by excluding neg ative mar g ins from offse tting positive comparisons has led to a n inacc urate calc ulation of the we ighte d-ave rag e mar g in for NSK.” Id. ¶ 10. They

move for a

preliminary

injunction ag ainst liquidation of the entries of

merc handise produc ed or e x ported by NSK Be aring s Europe Ltd. that were aff ecte d by the administrative re view of the antidumping duty order on subject merc handise fr om the United King dom, as provided in Section 516A( c)( 2) of the T ariff Act of 1930, a s amende d, 19 U.S.C. § 1516a(c )(2) (2006). Mot. for Prelim. I nj. (“Pls. Mot.”). Def endant a nd defe ndant-interve nor oppose the motion, arguing tha t plaintiffs’ cha lleng e to the De partment’s zeroingmethodology has no likelihood of succ ess on the mer its and that the injunction plaintiffs seek would not be in the public intere st. Def.’ s Opp’n to Pls.’ Mot. for a Prelim. Inj. (“De f. Opp’n” ) 1-5; The Timken

To ca lculate a

weig hted-avera g e dumping marg in in an administrative re view, the U.S. 1 Depa rtment of Commerce (“Commerc e” or the “De partment” ) first dete rmines two values f or eac h entry

of subject mer chandise falling within the period of r eview: the nor mal value a

nd the export price (“ EP”) (or

the construc ted export price ( “CEP”) if the E P cannot be de termined). 19 U.S.C. § 1675(a)(2) (A)( i) (2006). Commerc e then de termines a ma rg in for ea ch entr

y by taking the amount by

which the nor

mal value e x cee ds the EP or CEP. 19 U.S.C

. §§ 1675(a) (2)( A)(ii), 1677( 35)(A) . I f normal va lue does not excee d EP or CEP, C ommerce assig ns a value of zero, not a ne g ative value , to the entry . Finally , Commerce a g g reg ates these values to ca lculate a

weig hted-avera g e dumping marg in. 19 U.S.C. § 1677(35)(B ).Court No. 10- 00289 P age 3

Co.’s Opp’n to the Mot. of NSK for a Prelim. Inj. (“De f.-Interve nor’s Opp’ n”) 5- 8. The c ourt conclude s that plaintiffs have f ailed to demonstrate any

likelihood that they

will succee d on the merits of their c laim and, on the basis of that conclusion, denies the motion for a n injunction ag ainst liquidation. I. B A C K G R O U N D On J une 24, 2009, Commerce initiated administrative revie ws of antidumpingduty order s on ball bear ings a

nd parts ther eof, f

or the pe riod from May

1, 2008 throug h April 30, 2009 (“pe riod of re view”)

. Initiation of Antidumping & Countervailing Duty Administrati ve R evie ws & Reque sts for Revocation in Part , 74 Fe d. Reg . 30,052 (June 24, 2009). On April 28, 2010, the Depa rtment published preliminary results of the a dminist rative r eviews. Ball Bearings & Parts Thereof From France

, Germany

, Italy, Japan, &

the United Kingdom: Preliminary Re sults of Antidumping Duty Administrative Rev iews, Preliminary Results of Changed-Circumstances Rev iew, Rescission of Antidumping Duty Administrati ve R evie ws in Part, & Intent to Rev oke Order in Part , 75 Fe d. Reg . 22,384 (Apr. 28, 2010) . The De partment published the F inal Results on September 1, 2010, de termining an antidumpingduty marg in of 10.04% for

NSK Be aring s Europe Ltd. Ball Bearings & Parts Thereof From France, G ermany , Italy, Japan, &the United Kingdom: Final Results of Anti dumping Duty Administrative Rev iews, Final Results of ChangedCircumstances Re view, &Rev ocation of an Order in Part , 75 Fe d. Reg . 53,661, 53,662 (Sept. 1, 2010) (“ Final Results ”). O n September 17, 2010, pla intiffs filed their summons, and on September 23, 2010, the ir complaint, motion for preliminary injunction and memorandum in support there of. Summons; C ompl.; P ls. Mot.; M em. in Supp. of Mot. of NSK L td., NSKCourt No. 10- 00289 P age 4

Corporation, and N SK Precision Americ a, Inc. for Prelim. I nj. (“Pls. Mem.”). Def endant a nd 2 defe ndant-interve nor filed their oppositions t o plaintiffs’ injunction motion on S eptember 29, 2010 and Oc tober 4, 2010, re spectively . Def .’s Opp’n; De f.-Interve nor’s Opp’ n. On Octobe r 8, 2010, plaintiffs moved for leave to file a re ply . Mot. for L eave to File a Re ply in Supp. of Mot. for Pre lim. I nj. II. D I S C U S S I O N The c ourt is gr anted subjec t matter jurisdiction by Section 201 of the Customs Courts Act of 1980, 28 U.S.C. § 1581(c), to a djudicate plaintiffs’ claim contestingthe Fina l Results. I n ruling on plaintiffs’ motion for pre liminary injunctive relief

, the cour t must consider as fac tors whether

the movant is likely

to succe ed on the mer its, whether the mova nt will suffer irrepa rable harm if the r elief is not g rante d, whether the balanc e of the hardships tips in the movant’s favor, and whether a pre liminary

injunction will not be contr ary to the public interest. See B elgium v. United States , 452 F.3d 1289, 1292 ( Fe d. Cir. 2006) (quoting U.S. Ass’n of Importers of Textiles &Apparel v. U.S. D ep’t of Commerc e , 413 F.3d 1344, 1346 ( Fe d. Cir. 2005). “N o one fa ctor, take n individually , is nece ssarily dispositi ve.” FMC Corp. v. United States , 3 F.3d 424, 427 ( Fe d. Cir. 1993). Def endant a nd defe ndant-interve nor ar g ue that plaintiffs have no likelihood of succ eeding on the merits of their c laim beca use the U.S. Court of Appe als for the Fe dera l Circuit (“Court of Appea ls”) re peate dly

has sustained Commerc e’s a pplication of the zeroingmethodology in administrative re views. De f.’s Opp’ n 3 (citing Koyo Seiko Co. v. U nited States , 551 F.3d 1286

Plaintiffs incorre ctly

titled their memorandum in support of their motion with the wrong 2 party names. The court a ssumes plaintiffs meant to re fer to the parties in this action, NSK Be aring s Europe Ltd., NSK Europe Ltd., and NSK Corporation.Court No. 10- 00289 P age 5

(F ed. Cir. 2008); SKF USA, Inc. v . United States , 537 F.3d 1373 ( Fe d. Cir. 2008); NSK L td. v. United States , 510 F.3d 1375 ( Fe d. Cir. 2007); Corus Staal BV v. United States , 502 F.3d 1370 (F ed. Cir. 2007)); De f.-Interve nor’s Opp’ n 5 (“A s NSK appea rs to acknow ledg e, howe ver, the Court of Appea ls for the F eder al Circuit has indicate d that it will affirm the De partment’s zeroing prac tice ‘until Commerce officia lly abandons the prac tice pursua nt to the specified statutory scheme .’”) (citing Pls. Mem. 6 (citing NSK L td. , 510 F.3d at 1380)). Ac cordingto the argument defe ndant and de fenda nt-intervenor

make in opposing the injunction, plaintiffs are unable to distinguish the issue pr esente d in this case fr om the binding pr ece dent established a nd repe atedly

rea ffirme d by

the Court of Appe als. Plaintiffs insis t that this case is distinguishable f rom all past ca ses upholding the Depa rtment’s zeroingprac tice bec ause of two rec ent deve lopments, under which that prac tice, as applied in antidumping a dminist rative r eviews, ha s been r ejec ted in decisions re sulting fr om dispute resolution proce eding s conducte d under the North Amer ican F ree Trade Ag ree ment (“N AFT A”) and the World Tra de Or g anization (“WTO”). Pls. Mem. 5-6. Plaintiffs’ ar g ument is, essentially , that their cla im challeng ing the use of zeroingin the Final Results prese nts novel issues not previously

considere d by

the Court of Appe als or this court. Plaintiffs cite, fir st, a

rec ent NAF TA binational pane l decision that preda ted the issuance of the F inal Results, Stainless Steel Shee t and Strip i n Coils From Mexico: Final Results of 2004/2005 Ant idumping Revie w, Dec ision of t he Pane l , USA-MEX-2007- 1904-01, at 24 (A pr. 14, 2010) ( “Stainless Steel from Mexi co”) . Pls. Mem 5; C ompl. ¶ 11. Plainti ffs de scribe the panel de cision as holding that the Depa rtment’s zeroingprac tice violates the U .S. antidumping statute and a s remandinga 2004- 2005 administrative re view for rec alculation of a

responde nt’s dumping mar g in. Pls . Mem 5;Court No. 10- 00289 P age 6

Compl. ¶ 11. Pl aintiffs ar g ue that, in re sponse to the NAF TA pane l decision, “the a g ency should have similarly

rec alculate d the final re sults of the 2008-2009 ball bea ring revie ws to eliminate this practice ” and that “[t] he ag ency ’s fa ilure to do so constituted an ar bitrary and ca pricious ac t as the a g ency

was pre paring

to unlawfully

treat like case s differ ently .” Pls. Mem. 5. Citi ng developments in the World Trade Org anization (“WTO”), pla intiffs arg ue, fur ther, that the “De partment ha s acknow ledg ed the WTO’s c onclusions that the U.S. prac tice of zeroing in administrative revie ws is unlawful, and f urther ha s indicated its intent to comply with the WTO’s decision.” Compl. ¶ 11 (c iting Appe llate B ody Report, United States - Me asures Relating to Zeroing and Sunset Reviews , ¶¶ 137, 156, 165 a nd 185, WT/DS 322/AB/R (Jan. 9, 2007); Appellate Body

Report , United States - Laws, Regulations and Methodology for Calculating Dumping Margins (“Zeroing”) , WT/DS 294 (Apr. 18, 2006) . Plaintiffs report that “the U.S. Gove rnment re cently ag ree d to fully

comply with the WTO’s zeroing r uling, a s the United States and Eur opean Union suspended proc eeding s befor e the WTO ar bitration panel that had bee n schedule d to decide on Septe mber 8, 2010, how muc h reta liation the Europea n Union could impose on U.S. trade” and that the “ United States plans to beg in the proce ss of complying with the WTO’s zeroing r uling be fore the end of

the y ear .” Pls. Mem. 5-6 (citing“U.S., EU Reac h Dea l To Suspend Arbitration Proce eding s In Z eroingCase,” Inside US Trade , Sept. 10, 2010, at 1). As plaintiffs’ NA FTA -re lated ar g ument assumes, the issue of the eff ect on U.S. law of

a decision of a

NAF TA binational pane l disallowing zeroingwas not bef ore the Court of Appea ls in the previous ca ses upholding the Depa rtment’s pra ctice of

zeroing in administrative revie ws. But howe ver nove l that issue may be, the c ourt finds no merit in plaintiffs’ ar g uments that, as aCourt No. 10- 00289 P age 7

result of a rema nd order ed by

the NAF TA pane l, Comm erc e wa s obligated by law to re calc ulate the Fina l Results t o eliminate zeroing and is ac ting c ontrary to law in arbitra

rily and ca priciously prepa ring to treat like c ases diff ere ntly . Section 411 of the Nor th America

n Fr ee T rade Ag ree ment I mplementation Act (“NAF TA Implementation Act”) , 19 U.S.C. § 1516a(g ), re quires Commerce to implement the de cision of the NAF TA pane l, and neither the pane l’s decision nor the Depa rtment’s implementation of it may be re viewed on a

ny question of law or

fac t by any court of the United States. 19 U.S.C. § 1516a(g )(2) (B ), (g )(7) (A). T he cour t fails to see how Commerce c an be sa id to be acting unlawfully

in prepa ring to treat like c ases diff ere ntly wher e, as her e, by

statute it would appea

r to lack discr etion to do any thing but implement Stainless Steel from Mexico and y et unquestionably has statutory

authority , rec og nized repea tedly by the Court of Appe als, to apply

its z eroingprac tice in administrative re views other tha n the one that wa s the subject of the N AFT A pane l’s decision. The f uture inconsistenc y

to which plaintiffs allude would not result from a de cision by Commerce to tre at like ca ses diffe rently that, upon judicial revie w, would be se t aside as a n arbitra ry and ca pricious ag ency

action. I nstead, it would be a conseque nce of

the statutory

scheme established by

19 U.S.C. § 1516a(g ) and r elated pr ovisions, under which NAF TA binational pane l decisions may rea ch re sults inconsist ent with those of U.S. courts and yet ar e not re viewable by U.S. courts. Nor c an it plausibly

be ar g ued that the NA FTA panel’ s decision will require this court to conclude that Commerce la cked the discretion under the antidumping la

w to apply

zeroing in the Final Results. The NA FTAI mplementation Act provide s that a final de cision of a NA FTA binational panel is not binding pr ece dent in an ac tion broug ht in the Court of I nternational Trade under 19 U .S.C. § 1516a(a), a lthough the c ourt “may take” such pane l decision “intoCourt No. 10- 00289 P age 8

consideration.” 19 U.S.C. § 1516a(b)(3) . I n this case, the c ourt’s takingthe NAF TA binational panel de cision into consideration could be of no ava il to plainti ffs. Any “conside ration” of

the panel de cision could not overc ome the pre cede nt binding on the c ourt, under which Commerce has statutory

authority to apply the zeroing methodology when c onducting an administrative revie w under

19 U.S.C. § 1675. See , e.g. , NSK L td. v. United States , 510 F.3d at 1380 (stating that “Commerce ’s zeroingprac tice is in acc ordanc e with our we ll-established pre cede nt.”). Plaintiffs’ citation to a pre ss report that the United States will comply with the WTO’s zeroing ruling and plans to beg in the proce ss of complying w ith that ruling be fore the end of this y ear is also unavailing . The salient point is that the United States, as of the September 1, 2010 publication date of

the Fina l Results, had not beg un the proc ess of discontinuing Commerce’ s prac tice of zeroingin response to the a ctions taken by the WTO. That proc ess is g overne d g ener ally by the Uruguay

Round Ag ree ments Act (“ URAA”) , which in Section 123 established a proce dure f

or implementing in U.S. law a WTO dec ision that a regulation or prac tice of a U.S. ag ency is inconsistent with one of the ag ree ments implemented by the URAA. See19 U.S.C. § 3533(g ); Corus Staal

BV , 395 F.3d at 1349. To eff ectuate a c hang e of a g ency regulation or prac tice due to a

n adver se WTO ruling , Section 123 provides for a proc ess involving the United States Trade Represe ntative, Cong ress, the r eleva nt ag ency , private se ctor a dvisory committees, and the public, a

proce ss that culminates in a final r ule or other

modification. See19 U.S.C. § 3533(g )(1) . By

statute, any

action the United States takes to comply with the WTO’s decision on zeroing in administrative revie ws will not apply retroa ctively

to the Final Results. Among other proc edure s, the statute direc ts that the ag ency reg ulation or prac tice not be r escinde d orCourt No. 10- 00289 P age 9

modified befor e the a g ency has published its proposed modification for public comment. Id. § 3533(g )(1) (C). 3 I n summary , plaintiffs have instit uted this action in relianc e on NAF TA- and WTOrelated deve lopments that fail to support their claim that Commerce unlawfully applied zeroing in the administrative re view that wa s completed by the Fina l Results on S eptember 1, 2010. As of that date , it was well established in U.S. law, through repe ated a nd consistent holdings of the Court of Appea ls, that the prac tice of zeroingis statutorily permissible in administrative revie ws, and neither

of the international developments to which plaintiffs dire ct the cour t’s attention can result in a cha

ng e in U.S. law that will apply retroa ctively . The c ourt conc ludes that plaintiffs have not de monstrated any likelihood that they

can suc cee d on the merits of their c laim. The irr epar able ha

rm fac tor is strongly

in plaintiffs’ fa

vor. Plaintiffs have shown that they will be immediately

and irre para

bly harme d absent the injunctive r elief the y seek. A s they

corr ectly argue, “be cause liquidation of the entries at issue would deprive N SK of its right to meaning ful judicial revie w of the D epar tment’s Final Results, NSK is fac ed with immediate and irrepa rably [si c] injury

absent injunctive re lief.” Pls. Mem. 3. L iquidation of the entries at issue in this l itigation in ac corda nce w ith the Final Results would prec lude any relief plaintiffs might obtain with respec t to those entries, and, in so doing , might moot entirely the claim plaintiffs

asser t in this litigation.

The Ur uguay Round Ag ree ments Act (“ URAA”) also established a proce dure in 3 Section 129, providing for the implementation of an adve rse WTO pane l or Appellate Body repor t that addre sses a pa

rticular a ntidumping deter

mination by

Commerce. See19 U.S.C. § 3538. Even we re a

Section 129 proce dure to be initiated now or in the nea r future , it could not apply to entries made prior to a date on which the United States Trade Represe ntative direc ts the Depa rtment to implement the WTO decision and, there fore , could have no eff ect on judicial revie w of the F inal Results. See id . § 3538(c) (1)( B)

.Court No. 10- 00289 P age 10

The “ balanc e of the hardships” f actor also favor s plaintiffs. Whil e the de nial of an injunction prevents plaintiffs fr om obtaining a ny favor able r esult of judicial re view as to the aff ecte d entries a

nd may well moot the entire c ase, de fenda nt suffer s no hardship fr om the g rant of the injunction. I f the injunction is gr anted, the g overnme nt, which alre ady is in possession of

secur ity in the form of a

ntidumping duty

cash de posits, would be in a position t o collect, with interest, any

additional duties determined to be owing , once a judicial decision in this lit iga tion is final and c onclusive. Concerningthe “public inter est” fa ctor, the c ourt conc ludes that a g rant of the injunction plaintiffs seek w ould not be contraryto the public interest, but that no public intere st consideration is sufficient to outweig h the serious de ficienc y aff ectingthe claim on the mer its. I t is, of course , in the public interest that the e ntries at issue in this lit iga tion be liquidated in

acc ordanc e with the cor

rec t result on the merits, but in this case plaintiffs c annot show any prospec t that they

could succ eed in c ontesting that result as set for th in the Final Results. The soug ht injunction would remain in place not only throug hout a proc eedingconducte d acc ording to USCI T Rule 56.2 but also throug hout all appea ls. Due to plaintiffs’ inability to demonstrate any prospec t of succe ss, the court c oncludes that the public inter est in this case will be be tter

serve d if the liquidation process, a s it would be conducte d in the ordinary course , is not disturbed. The strongshowing plaintiffs are able to make on irrepa rable harm a

nd balanc ing of

the hardships ar e not suffic ient to overc ome the lac k of any prospec t of succe ss on the merits. I n

rea chingthis conclusion, the court is mindful that the denial of the injunction moti on may well moot plaintiffs’ case . Howeve r, the c ourt is guide d by the principle that an injunction ag ainstCourt No. 10- 00289 P age 11

liquidation of entries pursua nt to 19 U.S.C . § 1516a(c )(2) should not be order ed without at least a showing that the issue pre sented is not “so cle ar- cut as to wa rra nt disposing of this appea l,” Belgium , 432 F.3d at 1295, a showingplaintiffs are unable to make in support of their motion. III. C O N C L U S I O N A N D O R D E R The c ourt will deny

plaintiffs’ motion for a pr eliminary injunction ag ainst liquidation beca use plaintiffs have failed to de monstrate any likelihood of succe ss on the merits of the sole claim they

advanc e in this lit igation.

ORDER Upon consider ation of plaintiffs’ Motion for Pre liminary I njunction, plaintiffs’ memorandum in support there of, De fenda nt’s Opposition to P laintiffs’ Motion for a Preliminary I njunction, The Timken Company ’s Opposition to the Motion of NSK for a Preliminary I njunction, plaintiffs’ Motion for L eave to File a Re ply in Support of Motion for Preliminary I njunction, and all other pa pers a nd proce eding s here in, it is here by ORDERED that plaintiffs’ Motion for L eave to File a Re ply in Support of Motion for Preliminary

I njunction be, and he reby is, GRANTED; and it is further ORDERED that plaintiffs’ Motion for Preliminary I njunction be, and he reby is, DENI ED. /s/ Timot hy C. St ance u Timothy C. St ance u J udg e Dated: Oc tober 15, 2010 New Y ork, Ne w York