Court Opinion

ID: 817872
Source: CourtListenerOpinion
Date Created: 2013-02-01 01:59:00.040261+00
Date Added: 2024-06-11T12:27:23.474281
License: Public Domain

Slip Op. 11-126

               UNITED STATES COURT OF INTERNATIONAL TRADE

 SKF USA INC., SKF FRANCE S.A., SKF
 AEROSPACE FRANCE S.A.S., SKF
 GMBH, and SKF INDUSTRIE S.P.A.,

                       Plaintiffs,

                       v.
                                                 Before: Timothy C. Stanceu, Judge
 UNITED STATES,
                                                 Court No. 07-00393
                       Defendant,

                       and

 TIMKEN US CORPORATION,

                       Defendant-Intervenor.

                                     OPINION AND ORDER

[Remanding the decision of the U.S. Department of Commerce for further explanation]

                                                           Dated: October 14, 2011

      Herbert C. Shelley, Alice A. Kipel, and Laura R. Ardito, Steptoe & Johnson LLP, of
Washington, DC, for plaintiffs.

       Claudia Burke, Senior Trial Attorney, Commercial Litigation Branch, Civil Division,
U.S. Department of Justice, of Washington, DC, for defendant. With her on the brief were
Gregory G. Katsas, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M.
McCarthy, Assistant Director. Of counsel on the brief were Mykhaylo A. Gryzlov, Deborah R.
King, and Jonathan Zielinski, Office of the Chief Counsel for Import Administration, U.S.
Department of Commerce, of Washington, DC.

       Geert M. De Prest, Terence P. Stewart, William A. Fennell, and Lane S. Hurewitz,
Stewart and Stewart, of Washington, DC, for defendant-intervenor.

       Stanceu, Judge: Before the court is the mandate issued by the United States Court of

Appeals for the Federal Circuit (“Court of Appeals”) in SKF USA Inc. v. United States, 630 F.3d
Court No. 07-00393                                                                           Page 2

1365 (Fed. Cir. 2011). CAFC Mandate in Appeal # 2010-1128 (Mar. 29, 2011), ECF No. 75.

This case affirmed in part and vacated in part the judgment of the United States Court of

International Trade (“CIT”) in SKF USA Inc. v. United States, 33 CIT __, 659 F. Supp. 2d 1338

(2009), in which the CIT affirmed the final determination (“Final Results”) that the International

Trade Administration, United States Department of Commerce (“Commerce” or the

“Department”) issued in administrative reviews of antidumping duty orders on ball bearings and

parts thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom. Ball

Bearings & Parts Thereof from France, Germany, Italy, Japan, Singapore, & the United

Kingdom: Final Results of Antidumping Duty Admin. Reviews & Rescission of Review in Part,

72 Fed. Reg. 58,053 (Oct. 12, 2007).

       The Court of Appeals, agreeing with plaintiffs SKF USA Inc., SKF France S.A., SKF

Aerospace France S.A.S., SKF GmbH, and SKF Industrie S.p.A. (collectively, “SKF” or

“plaintiffs”) and rejecting the CIT’s affirmance of the Final Results, held that Commerce had

failed to provide an adequate explanation for its decision to modify its practice for calculating

the constructed normal value of subject merchandise that the exporter purchased from an

unaffiliated supplier. SKF USA, 630 F.3d at 1373-74 (citing Motor Vehicle Mfrs. Ass’n of U.S.,

Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42 (1983)). During the antidumping

investigation and the first sixteen administrative reviews, Commerce constructed the normal

value of subject merchandise using the exporter’s acquisition costs. Id. at 1368-69. During the

seventeenth administrative review, the review at issue in this case, Commerce constructed

normal value using the unaffiliated supplier’s costs of production. Id. at 1369-70.
Court No. 07-00393                                                                         Page 3

       The Court of Appeals considered inadequate the Department’s explanation of the change

in practice, concluding that Commerce failed to confront “two significant concerns raised by

SKF.” Id. at 1374. Those concerns were, first, that under the new method an exporter “could

not change its pricing to avoid dumping because it would have no knowledge of its unaffiliated

supplier’s actual production costs.” Id. (“Commerce did not address SKF’s concern that it could

not control its pricing to avoid dumping in its Issues and Decision Memorandum or explain why

this concern was unjustified or why it was outweighed by other considerations.”). The second

concern was that Commerce potentially would “apply an adverse inference if the unaffiliated

supplier failed to provide cost data.” Id. (“Use of adverse inferences may be unfair considering

SKF has no control over its unaffiliated supplier’s actions. . . . Commerce must explain why

SKF’s concern is unwarranted or is outweighed by other considerations.”); see Tariff Act

of 1930, § 782, 19 U.S.C. § 1677e(b) (2006) (governing use of adverse inferences). The Court

of Appeals observed that Commerce decided to draw an adverse inference on analogous facts in

the subsequent review and that the CIT had held that decision to be unlawful. SKF USA, 630
F.3d at 1374-75 & n.6.

       Because the Court of Appeals grounded its reversal of the CIT in the inadequacy of the

Department’s explanation of the change in practice, rather than disallow the change in practice

per se, the court orders a remand under which Commerce must reconsider its decision and

address, at a minimum, the two significant concerns raised by plaintiffs.

                                             ORDER

       In response to the decision and mandate issued by the Court of Appeals in SKF USA Inc.

v. United States, 630 F.3d 1365 (Fed. Cir. 2011), it is hereby
Court No. 07-00393                                                                          Page 4

       ORDERED that, on remand, Commerce shall reconsider its decision in Ball Bearings &
Parts Thereof from France, Germany, Italy, Japan, Singapore, & the United Kingdom: Final
Results of Antidumping Duty Admin. Reviews & Rescission of Review in Part, 72 Fed. Reg.
58,053 (Oct. 12, 2007) to construct the normal value for entries of subject merchandise produced
by a supplier unaffiliated to the exporter using the supplier’s costs of production rather than the
exporter’s acquisition costs; it is further

       ORDERED that Commerce shall provide an explanation for any decision that it reaches
upon reconsidering its previous decision and shall include in that explanation, at a minimum, an
analysis responding to the two significant concerns raised by plaintiffs that were identified by the
Court of Appeals in SKF USA, 630 F.3d at 1373-75; and it is further

        ORDERED that Commerce shall file its remand redetermination with the court within
sixty (60) days from the date of this Opinion and Order, and that defendant and defendant-
intervenor shall have thirty (30) days from the date on which that redetermination is filed with
the court to file comments thereon.

                                                              /s/ Timothy C. Stanceu
                                                             Timothy C. Stanceu
                                                             Judge

Dated: October 14, 2011
       New York, New York