Court Opinion

ID: 818986
Source: CourtListenerOpinion
Date Created: 2013-02-04 06:01:12.459152+00
Date Added: 2024-06-11T09:02:54.423529
License: Public Domain

Slip Op. 03-10

           UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
                                    :
RHP BEARINGS LTD., NSK BEARINGS     :
EUROPE LTD. and NSK CORPORATION,    :
                                    :
          Plaintiffs,               :
                                    :
          v.                        :
                                    :
UNITED STATES,                      :   Court No. 98-07-02526
                                    :
          Defendant,                :
                                    :
          and                       :
                                    :
THE TORRINGTON COMPANY,             :
                                    :
          Defendant-Intervenor.     :
___________________________________:

[Commerce’s Remand Results are affirmed. Case dismissed.]

     Lipstein, Jaffe & Lawson L.L.P. (Robert A. Lipstein, Matthew
P. Jaffe and Grace W. Lawson) for RHP Bearings Ltd., NSK Bearings
Europe Ltd. and NSK Corporation, plaintiffs.

     Robert D. McCallum, Jr., Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice (Lucius B. Lau); David R. Mason
Jr., Senior Attorney, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, for the
United States, defendant.

     Stewart and Stewart (Terence P. Stewart and Geert De Prest)
for The Torrington Company, defendant-intervenor.

                                           Dated: January 28, 2003
Court No. 98-07-02526                                                         Page 2

                                      JUDGMENT

I.    Standard of Review

      The Court will uphold Commerce’s redetermination pursuant to

the   Court’s     remand   unless     it   is   “unsupported    by    substantial

evidence on the record, or otherwise not in accordance with law.”

19 U.S.C. § 1516a(b)(1)(B)(i) (1994).                 Substantial evidence is

“more than a mere scintilla.          It means such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.”

Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting

Consolidated      Edison   Co.   v.    NLRB,    305   U.S.   197,    229    (1938)).

Substantial evidence “is something less than the weight of the

evidence,    and    the    possibility      of    drawing     two    inconsistent

conclusions from the evidence does not prevent an administrative

agency’s finding from being supported by substantial evidence.”

Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966).

II.   Background

      On July 1, 2002, this Court issued an order directing the

United    States     Department       of   Commerce,     International        Trade

Administration (“Commerce”), to: (1) “explain its methodology for

[the] calculation of constructed value profit . . . [;] and [(2)]

explain     why     that    methodology          comported     with        statutory

requirements.”      RHP Bearings Ltd. v. United States (“RHP Bearings

III”), Ct. No. 98-07-02526, 2002 WL 1424571, at *1 (CIT July 1,
Court No. 98-07-02526                                                Page 3

2002).    This order was mandated by the decision of the Court of

Appeals for the Federal Circuit (“CAFC”) in RHP Bearings Ltd. v.

United States (“RHP Bearings II”), 288 F.3d 1334 (Fed. Cir. 2002),

affirming-in-part, vacating-in-part, and remanding the judgment of

this Court in RHP Bearings Ltd. v. United States (“RHP Bearings

I"), 24 CIT ___, 120 F. Supp. 2d 1116 (2000).            The CAFC based its

decision in RHP Bearings II on its prior holding in SKF USA Inc. v.

United States, 263 F.3d 1369 (Fed. Cir. 2001).           The administrative

determination at issue in RHP Bearings I, RHP Bearings II, and

subject to the order of RHP Bearings III is entitled Final Results

of Antidumping Duty Administrative Reviews of Antifriction Bearings

(Other Than Tapered Roller Bearings) and Parts Thereof From France,

Germany, Italy, Japan, Romania, Singapore, Sweden, and the United

Kingdom (“Final Results”), 63 Fed. Reg. 33,320 (June 18, 1998).

     On September 30, 2002, Commerce, pursuant to this Court’s

order    in   RHP   Bearings    III,   submitted   its   Final   Results   of

Redetermination Pursuant to Court Remand (“Remand Results”).               In

particular,     Commerce:      (1)   set   forth   the   pertinent   factual

background of its (a) model-match process, and (b) constructed

value (“CV”) profit methodology; (2) explained its application of

the term “foreign like product,” in addition to addressing the

contentions raised by RHP Bearings Ltd., NSK Bearings Europe Ltd.

and NSK Corporation (“RHP-NSK”) regarding this term; and (3)
Court No. 98-07-02526                                                   Page 4

explained why its CV profit methodology comports with statutory

requirements.

     On September 30, 2002, The Torrington Company (“Torrington”)

submitted    comments   on   the   draft    results   issued    by    Commerce

identifying certain clerical errors that were corrected by Commerce

in the final Remand Results.        RHP-NSK also submitted comments on

the draft results, which were addressed by Commerce in the Remand

Results.     RHP-NSK    later   submitted    comments   to    this   Court   on

November 6, 2002, see Comments of RHP-NSK on Remand Determination

(“RHP-NSK’s Comments”), and Torrington submitted rebuttal comments,

see Rebuttal Comments of Torrington         (“Torrington’s Comments”), on

November 27, 2002.

III. Contentions of the Parties

     RHP-NSK propose that this Court re-remand the CV profit issue

to Commerce.    According to RHP-NSK, Commerce failed to comply with

RHP Bearings III because it did not supply the Court with a

reasonable   explanation     regarding     Commerce’s   use    of    differing

definitions of the term “foreign like product” in its CV profit and

normal value (“NV”) price-based calculations.

     Relying on the CAFC’s holding in SKF USA, 263 F.3d at 1382-
Court No. 98-07-02526                                        Page 5

83,1 RHP-NSK argue that Commerce must explain its practice of

defining the same term differently within the same antidumping

proceeding.     RHP-NSK urge the Court to dismiss any arguments

relating to the legislative history of the term “foreign like

product.”2    Additionally, RHP-NSK frame two issues that they claim

must be decided by the Court: (1) whether the contemporaneity rule,

under 19 U.S.C. § 1677b(a)(1)(A) (1994), is applicable to CV profit

calculations, and (2) whether a legally acceptable application of

the contemporaneity rule prevents Commerce’s use of the preferred

CV profit methodology under 19 U.S.C. § 1677b(e)(2)(A) (1994).3

     1
          The Court assumes that the correct case name to which
RHP-NSK refer is SKF USA Inc. v. United States, 263 F.3d at 1369,
and not FAG Kugelfischer Georg Schafer AG v. United States.
Plaintiffs supply the correct pin cite, but incorrect case name.

     2    The Court disagrees with RHP-NSK’s argument because
disregarding the legislative history of the antidumping statute
would cripple the Court’s ability to determine the reasonableness
of Commerce’s interpretation of the same statute. See Timex V.I.,
Inc. v. United States, 157 F.3d 879, 882 (Fed. Cir. 1998)
(citations omitted).
     3
         To prove that Commerce violated the antidumping statute
and that Commerce did not adhere to the order of RHP Bearings III,
RHP-NSK attack the following two arguments made by Commerce in the
Remand Results: (1) “. . . Congress did not intend the application
of the preferred methodology to preclude application of the
contemporaneity requirement of    [19 U.S.C. § 1677b(a)(1)(A),]”
Remand Results at 21; and (2)

     . . . [I]f [Commerce] were required to interpret and
     apply the term ‘foreign like product’ in precisely the
     same manner in the CV-profit context as in the price
     context, there would be no sales of the foreign like
     product upon which to base the CV-profit calculation.
     Accordingly, the preferred method of calculating CV
     profit   established  by  Congress  would   become  an
Court No. 98-07-02526                                                      Page 6

     Addressing      the   first   issue,   RHP-NSK    point    to   Commerce’s

statement in the Remand Results that “the contemporaneity provision

of [19 U.S.C. § 1677b(a)(1)(A)] does not apply to CV[,]”                   Remand

Results at 37, and argue that no section of Title 19 links the

contemporaneity requirement to CV profit calculations.                    RHP-NSK

further argue that Commerce’s use of non-contemporaneous data, in

other words data based on the full period of review (“POR”) as

opposed to only several months, in Commerce’s CV profit computation

serves as evidence that Commerce believes that the contemporaneity

rule does not apply to cost-based calculations.              RHP-NSK use this

conclusion to argue that the Remand Results ultimately reveal an

inconsistency in Commerce’s logic because Commerce rejected data

reported by RHP-NSK as non-contemporaneous while simultaneously

including    other    non-contemporaneous      sales    in     the   CV   profit

calculation.4

     inoperative provision of the statute.

Id. at 11.
     4
       The first argument raised by RHP-NSK is not at issue since
Commerce, at no time, claims that the contemporaneity rules applies
specifically to the sales it considers when calculating CV profit.
Instead, Commerce asserts that 19 U.S.C. § 1677b(a)(1)(A) is
relevant to Commerce’s “overall determination” of NV. Although the
Court agrees that it would be anomalous to reject data as non-
contemporaneous and then use other data that is itself non-
contemporaneous in the same proceeding, Commerce adequately
explains the relationship between its NV and CV profit calculating
methodologies.
Court No. 98-07-02526                                                       Page 7

     While attacking Commerce’s second statement, see supra note 3,

RHP-NSK further contend that substantial record evidence supports

the conclusion that the preferred methodology for calculating CV

profit under 19 U.S.C. § 1677b(e)(2)(A) is “fully operational” if

Commerce defines foreign like product in the same manner when

calculating CV profit and NV. RHP-NSK proffer that Commerce should

use all the data provided to it by RHP-NSK, instead of applying the

contemporaneity rule, and utilizing sales which only extend from

three months prior to the month of the United States sale to two

months after the month of sale.                 If Commerce cannot find the

necessary data to calculate CV under the preferred methodology by

extending the range of the data used, RHP-NSK propose that Commerce

calculate CV using one of the alternative methodologies listed

under 19 U.S.C. § 1677b(e)(2)(B) (1994).                Accordingly, RHP-NSK

argue   that    Commerce’s        explanation    of   its    use   of    differing

definitions for the term “foreign like product” should be rejected.

     Torrington contends that RHP-NSK essentially misunderstands

Commerce’s point regarding Commerce’s use of contemporaneous sales

and urges      the   Court   to    disregard    the   alternative       method   for

calculating CV profit proposed by RHP-NSK.                  Torrington finds the

arguments presented by RHP-NSK irrelevant, and states that “[t]he

question is not whether it is actually possible to calculate profit

for [CV] under the interpretation supported by [RHP-NSK]. Instead,
Court No. 98-07-02526                                                Page 8

the question is whether Commerce’s interpretation of . . . 19

U.S.C. § 1677b(e)(2)(A) is reasonable.”       Torrington’s Comments at

3 (emphasis in original).

IV.    Analysis

       In RHP Bearings II, 288 F.3d at 1346, the CAFC summarized that

Commerce, while calculating CV under 19 U.S.C. § 1677b(e)(2)(A) for

the POR at issue, used aggregate data for all foreign like products

rather than using “identical bearings and bearings of the same

family,” as it did for its calculation for NV.      In essence, RHP-NSK

argued that this practice was “arbitrary and capricious” since

Commerce failed to apply the same definition for the term “foreign

like    product”   while   calculating   CV   and   NV   for   the    same

administrative proceeding.     See id.

       In reaching its conclusion in RHP Bearings II, the CAFC

adhered to its prior holding in SFK USA, 263 F.3d at 1382, stating

that since Congress used the term “foreign like product” in various

sections of the antidumping statute and specifically defines the

term in 19 U.S.C. § 1677(16) (1994), it is

       presume[d] that Congress intended that the term have the
       same meaning in each of the pertinent sections or
       subsections of the statute, and . . . that Congress
       intended that Commerce, in defining the term, would
       define it consistently.        Without an explanation
       sufficient to rebut this presumption, Commerce cannot
       give the term “foreign like product” a different
       definition (at least in the same proceeding) when making
Court No. 98-07-02526                                              Page 9

      the [NV] price determination and in making the
      constructed value determination. This is particularly so
      because the two provisions are directed to the same
      calculation, namely, the computation of normal value (or
      its proxy, constructed value) of the subject merchandise.

The   CAFC    concluded    that   Commerce    failed   to   explain    its

justification for the inconsistent use of the term “foreign like

product” and outlined the explanation that Commerce must provide to

properly rebut the presumption that Commerce cannot use differing

definitions for an identical term in the same proceeding.          See SKF

USA, 263 F.3d at 1382-83.     In accordance with the CAFC’s decisions

on this issue in SKF USA and RHP Bearings II, this Court ordered

Commerce to explain its methodology for the calculation of CV

profit and explain why the methodology comported with statutory

requirements.

      In the Remand Results, Commerce explained its unique model-

matching     methodology   and    reporting    requirements   of      sales

transactions used in Commerce’s calculation of NV.              Commerce

explained that if it was “unable to find a sale of a comparison-

market model made in the ordinary course of trade that is identical

to or shares the family designation of the [United States] sale at

a time reasonably corresponding to the time of the [United States]

sale, [Commerce then] resort[s] to CV.”          Remand Results at 7.

Commerce detailed its calculation of CV, which Commerce derived by

adhering to 19 U.S.C. § 1677b(e), and later explained why Commerce
Court No. 98-07-02526                                               Page 10

“interpreted and applied the statutory term ‘foreign like product’

more narrowly in its [calculation of NV] than in its calculation of

[CV] . . . under [19 U.S.C. § 1677b(e)(2)(A) . . . .”            Id. at 10.

     According to Commerce, the preferred method for calculating

CV, found in 19 U.S.C. § 1677b(e)(2)(A), is to be used unless

“there are no home market sales of the foreign like product or

because all such sales are at below-cost prices.”                Id. at 11

(citation omitted).       Commerce can use the preferred methodology

only if sales      of the foreign like product exist that are within

the ordinary course of trade.         See 19 U.S.C. § 1677b(e)(2)(A).

Title    19   of   the   United   States   Code   and   the   Statement   of

Administrative Action (“SAA”)5 establish that only when “no above-

cost sales [exist] in the ordinary course of trade in the foreign

market under consideration will Commerce [then] resort to [CV].”

SAA at 833 (emphasis in original).         Accordingly, Commerce argues

that if it were to use the same definition of the term “foreign

     5
          The SAA represents “an authoritative expression by the
Administration concerning its views regarding the interpretation
and application of the Uruguay Round agreements.” H.R. Doc. 103-
316, at 656 (1994), reprinted in 1994 U.S.C.C.A.N. 4040. “[I]t is
the expectation of the Congress that future Administrations will
observe and apply the interpretations and commitments set out in
this Statement.” Id.; see also 19 U.S.C. § 3512(d) (1994) (“The
statement of administrative action approved by the Congress . . .
shall be regarded as an authoritative expression by the United
States concerning the interpretation and application of the Uruguay
Round Agreements and this Act in any judicial proceeding in which
a question arises concerning such interpretation or application”).
Court No. 98-07-02526                                              Page 11

like product” for the NV and CV profit calculations, it would

eliminate all sales of the foreign like product upon which to base

the CV profit calculation and would mandate that Commerce use one

of    the   alternative    methods    listed       under   19    U.S.C.    §

1677b(e)(2)(B)(i) through (iii) to calculate CV.                See Remand

Results at 11; see also SKF USA, 263 F.3d at 1376-77.             Commerce

explained that this outcome is common in every situation             where

foreign like product is interpreted in the same manner for both

price and CV profit determinations.          See Remand Results at 12.

Thus, “under a rigidly uniform interpretation of the term ‘foreign

like product,’ the preferred methodology for calculating CV-profit

would never be applied in any case.”         Id.

      Commerce   further   explains   that    differing    categories     of

merchandise can satisfy the meaning of the term “foreign like

product,” depending on the specific facts of each antidumping

proceeding, and illustrates this point by explaining its usual

practice of deriving different values, including NV.            See id. 12-

14.   In determining the viability of a comparison market for NV

under 19 U.S.C. § 1677b(a)(1)(C) (1994), Commerce adds that it

normally employs the definition of the term “foreign like product”

provided under § 1677(16)(C).     See Remand Results at 15; Proposed

Rule of Antidumping Duties; Countervailing Duties, 61 Fed. Reg.

7307, 7333 (Feb. 27, 1996).      To find foreign like products that
Court No. 98-07-02526                                                    Page 12

would   fit   into   the    definition     provided    under   §     1677(16)(A)

(identical products versus products of the “same general class or

kind”), and to use such products in its viability determination

would require Commerce to perform a “product-specific matching

analysis, and other analyses,” requiring data not yet available to

Commerce.     See Remand Results at 15-16.          The SAA makes clear that

“Commerce must determine whether the home market is viable at an

early stage in the [antidumping] proceeding to inform exporters

which sales to report.”        SAA at 821.          Commerce poses a similar

argument when explaining its normal practice of calculating whether

reasonable grounds to believe or suspect below cost sales exist

under 19 U.S.C. § 1677b(b)(2)(A)(i) (1994), and adds that it

defines the term “foreign like product” consistently in determining

CV profits.    See Remand Results at 20-25.

     Contrary to the contentions espoused by RHP-NSK, the Court

finds that the Remand Results provide sufficient explanation to

rebut   the    presumption     that      Commerce     cannot   use    differing

definitions for an identical term in the same proceeding. Commerce

adequately explained why the differing use of the same term is

necessary to establish NV and CV profit in the same antidumping

proceeding.      Commerce    set   out    the   factual   background     of   its

calculations and provided the Court with an adequate and reasonable

explanation of why the methodology at issue enables it to comply
Court No. 98-07-02526                                             Page 13

with the statute on a whole.         Accordingly, Commerce followed the

mandate of RHP Bearings III.

     V.   Conclusion

     The Court finds that Commerce sufficiently met its burden to

explain why a differing definition of the term “foreign like

product” is used in calculating NV and CV profit for RHP-NSK.

Therefore, having reviewed the Remand Results, it is hereby

     ORDERED   that   the   Remand    Results   are   affirmed   in   their

entirety, and it is further

     ORDERED that since all other issues have been decided, this

case is dismissed.

                                 _________________________________
                                        NICHOLAS TSOUCALAS
                                           SENIOR JUDGE

Dated:    January 28, 2003
          New York, New York
                             Erratum

Slip Opinion 03-10

RHP Bearings Ltd. v. United States, Court No. 98-07-02526

     On page 2, the heading “JUDGMENT” should be replaced with
the heading “ORDER”.

February 5, 2003.