Court Opinion

ID: 819260
Source: CourtListenerOpinion
Date Created: 2013-02-05 02:36:48.374169+00
Date Added: 2024-06-11T09:02:56.395780
License: Public Domain

Slip Op. 01-135

             UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
_______________________________________
                                        :
THE TORRINGTON COMPANY,                 :
                                        :
          Plaintiff and                 :
          Defendant-Intervenor,         :
                                        :
                     v.                 :
                                        :
UNITED STATES,                          :
                                        :
          Defendant,                    :                Consol.
                                        :                Court No.
          and                           :                99-08-00462
                                        :
KOYO SEIKO CO., LTD. and                :
KOYO CORPORATION OF U.S.A.;             :
NTN CORPORATION, NTN BEARING            :
CORPORATION OF AMERICA, AMERICAN        :
NTN BEARING MANUFACTURING               :
CORPORATION, NTN DRIVESHAFT, INC.,      :
NTN-BOWER CORPORATION and NTN-BCA       :
CORPORATION,                            :
                                        :
          Defendant-Intervenors         :
          and Plaintiffs.               :
_______________________________________ :

                                      ORDER

     This    Court    has   received   and    reviewed    the   United   States

Department    of     Commerce,    International    Trade    Administration’s

(“Commerce”) Final Results of Redetermination Pursuant to Court

Remand (“Remand Results”) for Torrington Co. v. United States

(“Torrington”), 25 CIT ___, 146 F. Supp. 2d 845 (2001).                     In

Torrington, this Court: (a) denied in part and granted in part
Consol. Court No. 99-08-00462                                    Page 2

USCIT R. 56.2 motions by Koyo Seiko Co., Ltd. and Koyo Corporation

of U.S.A. (collectively “Koyo”) and NTN Corporation, NTN Bearing

Corporation    of   America,   American   NTN   Bearing   Manufacturing

Corporation, NTN Driveshaft, Inc., NTN-Bower Corporation and NTN-

BCA Corporation (collectively “NTN”) and denied USCIT R. 56.2

motion by The Torrington Company (“Torrington”); and (b) remanded

this case to Commerce to: (1) annul all findings and conclusions

made pursuant to the duty absorption inquiry conducted for this

review, Torrington, 25 CIT at ___, 146 F. Supp. 2d at 858; (2)

articulate what methodology Commerce used in conducting the arm’s

length test, id., 25 CIT at ___, 146 F. Supp. 2d at 871; (3)

clarify what action Commerce took with respect to inputs that NTN

obtained from affiliated parties, id., 25 CIT at ___, 146 F. Supp.

2d at 869; and (4) explain Commerce’s decision concerning NTN’s

packing expenses.     Id., 25 CIT at ___, 146 F. Supp. 2d      at 885.

With respect to the fourth issue, this Court specifically explained

that

       [d]uring the prior reviews, Commerce re-allocated NTN’s
       packing expenses. During the review in issue, however,
       Commerce examined and denied NTN’s packing expenses.
       Commerce found NTN’s allocation of home market packing
       expenses distortive because NTN’s allocation allegedly
       did not take into account the differences in packing to
       different customers. Additionally, Commerce disallowed
       the claimed adjustment for home market packing expenses
       because NTN allegedly did not revise its methodology when
       Commerce requested such a revision. Issuing its final
       determination, Commerce stated that Commerce applied
       partial adverse facts available, and yet Commerce also
Consol. Court No. 99-08-00462                                           Page 3

       stated that Commerce denied the adjustment. NTN contends
       that Commerce’s treatment of NTN’s home market packing
       expenses, specifically: (1) Commerce’s denial of packing
       expenses; and (2) Commerce’s application of facts
       available and adverse inference to NTN’s home market
       packing expense, was not in accordance with the law.
       Because Commerce’s explanation of the action which it
       took is not clear, the Court remands [both parts of the]
       issue to Commerce for explanation of its final decision
       concerning NTN’s packing expenses.

Id. (internal citations omitted, emphasis supplied).

       Commerce complied with the Court’s remand with respect to the

first three issues.         See Remand Results at 2-7.          Furthermore,

addressing the fourth issue in the Remand Results, Commerce agreed

that   “[Commerce’s]   statement      that   [Commerce]    applied     partial

adverse facts available with regard to home-market packing expenses

was in error.”    Commerce restated that, in fact, Commerce “denied

the expense in its entirety because [Commerce] found that NTN’s

allocation methodology was distortive . . . .”            Remand Results at

7.   Commerce, therefore, clarified its position only with respect

to the first prong of the fourth issue, that is, incoherence of

Commerce’s statements, while failing to address the second prong,

that is,    the   reasons    for   Commerce’s   denial    of   NTN’s   packing

expenses.

       Consequently, in its response to the Remand Results, NTN

acknowledges that Commerce “denied NTN any adjustment for packing

expenses in the home market[] because [Commerce] was dissatisfied
Consol. Court No. 99-08-00462                               Page 4

with NTN’s [reporting] methodology.”   NTN’s Resp. ITA’s Letter of

Aug. 9, 2001, at 2.    NTN, however, contends that Commerce could

have “reallocated the expense as [Commerce] did in subsequent

reviews.”   Id.   Thus, NTN’s contention effectively parallels the

Court’s request to Commerce to explain why “Commerce’s application

of facts available and adverse inference to NTN’s home market

packing expense[] was not in accordance with the law.” Torrington,

25 CIT at ___, 146 F. Supp. 2d at 885.    While the Court does not

necessarily agree with NTN that Commerce erred in Commerce’s

decision not to reallocate the expense in the fashion utilized by

Commerce in other reviews, the Court holds that Commerce failed to

address the particular issue in the Remand Results.

     Indeed, a substantial deficiency in NTN’s reported data allows

Commerce to deny an adjustment.   Commerce’s power, however, is not

unconditional or free of exceptions.   It may be that Commerce can

justify its refusal to reallocate the expense at issue as Commerce

did in other reviews, but it may be that Commerce cannot do so.

     The only explanation provided by Commerce so far was the

statement that “Commerce[:] (1) found NTN’s allocation of home

market packing expenses distortive because [NTN] did not take into

account the differences in packing to different customers; and (2)

disallowed the claimed adjustment . . . because NTN did not revise

[NTN’s] methodology when Commerce requested such revision.” Def.’s
Court No. 99-08-00462                                                         Page 5

Mem.    Partial    Opp’n   Plts.’    Mot.    J.     Agency   R.   at    90.    This

explanation is insufficient because it is silent on the following

issues: (1) why Commerce could not reallocate the expenses; (2) how

distortive was the data supplied by NTN; (3) whether the revisions

to NTN’s methodology requested by Commerce were given to NTN in a

timely manner, that is, so NTN could comply with the request; and

(4)    whether    the   adjustment   to     NTN’s    methodology       required   by

Commerce was reasonable and feasible to NTN.                 If the Court is to

play    its   statutorily    required       role     in   reviewing     Commerce's

determination, it is important that the Court has clear guidance

from Commerce as to what was actually happening.

       Therefore, this case having been duly responded and commented

to, and the Court, after due deliberation, having rendered a

decision herein; now, in accordance with said decision, it is

hereby

       ORDERED that this case is remanded to Commerce so Commerce

would clarify its final decision concerning its denial of NTN’s

packing expenses ; and it is further

       ORDERED that the remand results are due within ninety (90)

days of the date that this order is entered.                  Any responses or

comments are due within thirty (30) days thereafter.                   Any rebuttal

comments are due within fifteen (15) days after the date the
Court No. 99-08-00462                               Page 6

responses or comments are due.

                                 ______________________
                                 NICHOLAS TSOUCALAS
                                    SENIOR JUDGE

Dated:    November 26, 2001
          New York, New York