Court Opinion

ID: 818722
Source: CourtListenerOpinion
Date Created: 2013-02-03 08:27:41.938218+00
Date Added: 2024-06-11T15:22:20.204251
License: Public Domain

Slip Op. 04-107

            UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
                                    :
CONSOLIDATED BEARINGS COMPANY,      :
                                    :
               Plaintiff,           :
                                    :            Court No. 98-09-02799
                    v.              :
                                    :
UNITED STATES,                      :
                                    :
               Defendant.           :
___________________________________:

[Commerce’s Remand Redetermination is affirmed. Case dismissed.]

     Pillsbury Winthrop LLP (Christopher R. Wall) for Consolidated
Bearings Company, plaintiff.

     Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, and Jeanne E. Davidson, Deputy Director, Commercial
Litigation Branch, Civil Division, United States Department of
Justice (David S. Silverbrand); of counsel: Patrick Gallagher,
Office of the Chief Counsel for Import Administration, United
States Department of Commerce, for the United States, defendant.

                                                           August 20, 2004

                                  OPINION

I.    Standard of Review

      The Court will uphold the agency’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) (2000).           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.”
Court No. 98-09-02799                                                                   Page 2

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)

(citations omitted).

II.    Background

       In Consolidated Bearings Co. v. United States (“Consolidated

I”), 25 CIT 546, 560, 166 F. Supp. 2d 580, 593 (2001),                           this Court

remanded the case to the United States Department of Commerce,

International         Trade   Administration           (“Commerce”)       to    “annul    the

Liquidation Instructions issued by Commerce on August 4, 1998.” On

November       6,     2001,        Commerce     filed      the      Final      Results     of

Redetermination Pursuant to Court Remand for Consolidated I, which

were    vacated       by   Consolidated         Bearings      Co.    v.     United      States

(“Consolidated II”), 26 CIT ___, 182 F. Supp. 2d 1380 (2002).                            This

Court ordered, in Consolidated II, 26 CIT at ___, 182 F. Supp. 2d

at    1384,    that    Commerce       “liquidate       all    Consolidated         Bearings’

imports of FAG Kugelfischer’s merchandise imported during the

period    of    review       in    accordance       with     the    September      9,   1997,

liquidation instructions.”                 On April 1, 2002, Commerce filed the
Court No. 98-09-02799                                                Page 3

Final Results of Redetermination Pursuant to Court Remand (Remand

Results   II)   that   were   subsequently   upheld    by   this   Court   in

Consolidated Bearings Co. v. United States (“Consolidated IV”),

2002 Ct. Intl. Trade LEXIS 63 (July 9, 2002).         The Court of Appeals

for the Federal Circuit (“CAFC”) in Consolidated Bearings Co. v.

United States (“Consolidated V”), 348 F.3d 997 (Fed. Cir. 2003),

reh’g denied, 2003 U.S. App. LEXIS 26770 (Fed. Cir. Dec. 30, 2003),

and the CAFC’s mandate of January 6, 2004, reversed, vacated and

remanded the judgment of the Court in Consolidated IV, 2002 Ct.

Intl. Trade LEXIS 63 (July 9, 2002).

     This Court remanded the case to Commerce to examine the

following questions: (1) whether Commerce had a consistent past

practice with respect to imports from unrelated resellers not

covered by the administrative review at issue; (2) whether Commerce

departed from a consistent past practice; and (3) whether any such

departure was arbitrary.        Consolidated V, 2004 Ct. Intl. Trade

LEXIS 8 (Jan. 30, 2004).        Pursuant to the Court’s order, dated

January   30,     2004,   Commerce   filed    its     Final    Results     of

Redetermination Pursuant to Court Remand (“Remand Redetermination”)

with the Court on April 28, 2004.

III. Discussion

     Plaintiff, Consolidated Bearings Company (“Consolidated”),

argues that “without any notice or explanation, Commerce changed
Court No. 98-09-02799                                                      Page 4

its [past] practice and issued liquidation instruction pursuant to

the automatic liquidation provision at the cash deposit rate.”

Pl.’s Mem. Opp’n Def.’s Redetermination (“Consolidated’s Mem.”) at

2.     Consolidated asserts that Commerce’s Remand Redetermination

“denies any change in its practice, [and] merely restates its new

practice and offers post hoc arguments as to why it says this has

been its practice all along.”             Id.        The examples provided by

Commerce are liquidation instructions issued less than thirty days

before     the     disputed     liquidation      instructions.           See    id.

Consolidated argues that these examples “show that the practice was

developed specifically for this case and are, in fact, evidence of

an arbitrary departure from Commerce’s actual consistent past

practice.”       Id. at 7.      Consolidated argues that Commerce’s past

practice     has    been   to    apply   the     weighted      average    of    the

manufacturer’s dumping rates in the final results to an importer

that    imports    merchandise    produced      by    a   manufacturer   from    an

unaffiliated reseller not covered by the administrative review.

See id. at 8.

       As the CAFC noted, 19 U.S.C. § 1675(a)(2)(c)(2000) “requires

Commerce to apply the final results of an administrative review to

all entries covered by the review.”             Consolidated V, 348 F.3d at

1005.    Consequently, when a review does not include a particular

importer’s       transactions,    then   the    importer’s     entries   are    not
Court No. 98-09-02799                                                       Page 5

statutorily entitled to the rates established by the review.                      Id.

at 1005-06.       In the instant case, Consolidated did not request a

review    and     Commerce   did    not   collect    or    analyze   information

regarding Consolidated’s imports of the subject merchandise.                      See

Remand Redetermination at 7.              Commerce asserts that its “past

practice has been to assess the reseller’s sales separately from

those of the manufacturer, provided that the manufacturer does not

have knowledge that its sales to the reseller are ultimately

destined for the United States.”              Id. at 6 (citing Final Rule: 19

CFR Parts 351, 353, and 355 Antidumping Duties; Countervailing

Duties (“1997 Final Rule”), 62 Fed. Reg 27,296, 27,303 (May 19,

1997)).        Commerce asserts that it treats a reseller who has not

requested a review as an unreviewed company, and Commerce assesses

a duty at the rate required at the time of entry.                 See id.      Here,

Commerce asserts that “[i]t would be inappropriate to assess final

duties    on     Consolidated’s     entries     at   the   same   rate    as     [FAG

Kugelfischer’s (“FAG”)] entries because FAG’s rate was calculated

based     on    importer-specific       sales     information     which    had    no

relationship to Consolidated’s entries made during the period of

review.”       Id. at 7.     Without information on a reseller’s sales,

Commerce asserts that it is unable to calculate a specific rate for

the “reseller sales or an imported-specific liquidation rate for

the     associated    imports      of   the     subject    merchandise.”          Id.

Furthermore, prior to giving the instructions at issue in this
Court No. 98-09-02799                                                       Page 6

case, Commerce announced its decision “to continue its current

practice with respect to automatic assessment; i.e., if an entry is

not subject to a request for review, [Commerce] will instruct

Customs Service to liquidate that entry and assess duties at the

rate in effect at the time of entry.”            1997 Final Rule at        27,313-

14.

      The   CAFC   found   that   for    this    case    the    Antidumping    and

Countervailing Duty Proceedings: Assessment of Antidumping Duties

(“Assessment Clarification”), 68 Fed. Reg. 23,954, 23,959 (May 6,

2003), is inapplicable for determining Commerce’s past practice.

See Consolidated V, 348 F.3d. at 1006-07.                    The CAFC indicated,

however, that “[a]t most, Commerce’s recent policy statements may

help identify Commerce’s consistent past-practice.”                 Id. at 1007.

Commerce states that “[b]ased on [its] prior-practice, when an

entity has not been assigned a rate from a previously completed

segment of a proceeding and that entity does not participate in a

current review, that entity is subject to the all-others rate and

its imports of subject merchandise are assessed at that rate.”

Assessment   Clarification,       68    Fed.    Reg.    at    23,959.     Commerce

explains that the Assessment Clarification is not consistent with

its past practice of liquidating resellers’ merchandise at the

cash-deposit rate in effect at time of entry because it calls for

assessing resellers’ entries at the all-others rate.                    See Remand
Court No. 98-09-02799                                                 Page 7

Redetermination at 12-13.     Commerce further explains that, in this

case, the liquidation of unreviewed entries is governed by 19

C.F.R. § 353.22(e)(1) (1998), which Commerce has interpreted “to

mean that, regarding entries for which no administrative review is

requested, [Commerce] is to instruct the [United States] Customs

Service to liquidate those unreviewed entries at the cash-deposit

rate in effect at the time of entry of the subject merchandise.”

Remand Redetermination at 13-14. See also J.S. Stone, Inc. v.

United States, 27 CIT ___, ___, 297 F. Supp. 2d 1333, 1345 (2003)

(noting that when a company makes the required cash deposit and

does not request an administrative review, “the cash deposit rate

ultimately becomes the rate at which the company is assessed

antidumping   duties”).      The   Assessment     Clarification     does   not

support Consolidated’s argument that Commerce’s policy at the time

it entered the subject merchandise was to assess the manufacturer’s

rate   to   reseller    transactions.      See    United   States    v.    ITT

Industries, Inc., 28 CIT ___, ___, 2004 Ct. Intl. Trade LEXIS 80,

at *48 (CIT July 8, 2003). Commerce indicates that “the Assessment

Clarification   altered    [Commerce’s]    past    practice   of   assessing

certain unreviewed entries at the cash-deposit rate to assessing

them at the all-others rate.”       Remand Redetermination at 13.

       Consolidated    maintains   that   Commerce’s   position,     in    ABC

International Traders, Inc. v. United States, 19 CIT 787 (May 23,
Court No. 98-09-02799                                                 Page 8

1995),   demonstrates   Commerce’s   past     practice    of     liquidating

entries from   unrelated   resellers   that    do   not   have    their   own

liquidation rate at the manufacturer’s rate.         See Consolidated’s

Mem. at 3.     In that case, Commerce liquidated entries from an

unrelated reseller at the manufacturer’s rate determined during an

administrative review.     See id.   Consolidated further argues that

Commerce has failed to support its assertion that its consistent

past practice was to liquidate entries from resellers who do not

have their own liquidation rates at the cash-deposit rate.                See

id. at 7.    Consolidated also asserts that the Court “has already

determined that Commerce’s past practice was to liquidate entries

from an unrelated reseller at the manufacturer’s rate established

in an administrative review, regardless of whether the reseller

requested an administrative review.”          Id. at 16 (citing Nissei

Sangyo America, Ltd. v. United States, 2003 Ct. Intl. Trade LEXIS

103 (CIT Aug. 18, 2003), and Renesas Tech. Am., Inc. v. United

States, 2003 Ct. Intl. Trade LEXIS 105 (CIT Aug. 18, 2003).

     Commerce explains that, when its has not applied the cash-

deposit rate in liquidating resellers’ merchandise, “there were

special circumstances in each case that made the application of a

rate other than the original cash deposit to the reseller more

appropriate and accurate.”     Remand Redetermination at 10.          On the

occasions that Commerce has ignored its regulation, 19 C.F.R. §
Court No. 98-09-02799                                                   Page 9

353.22(e)(1)1, and instructed Customs to liquidate an importer’s

entries of merchandise at the manufacturer’s rate established in an

administrative review, two factors were present: (1) the importer

who purchased the merchandise entered did not participate in the

administrative   review;    and   (2)   no   other   rate    other   than   the

manufacturer’s   rate    was   assessed      by   Commerce   in   the   review

proceedings. See ITT Industries, 2004 Ct. Intl. Trade LEXIS 80, at

*38 n.27.

     Consolidated did not participate in the administrative review

and meets the first factor Commerce has considered when it has not

adhered to its regulation.        Consolidated, however, does not meet

the second factor because rates other than the manufacturer’s rate

were assessed by Commerce to other resellers.           Compare ABC Int’l,

19 CIT at 790 (finding the assessment of the manufacturer’s rate to

plaintiff-importer was appropriate because the importer should have

known that it would be assessed the only existing rate, the

manufacturer’s rate).      See also Nissei, 2003 Ct. Intl. Trade 103

(finding    Commerce’s   liquidation      instructions       to   assess    the

manufacturer’s deposit rate to importer’s merchandise was arbitrary

     1
           The regulation states that absent a timely request for an
administrative review, Commerce “will instruct the [United States]
Customs Service to assess antidumping duties on the merchandise
. . . at rates equal to the cash deposit of, or bond for, estimated
antidumping duties required on that merchandise at the time of
entry . . . .” 19 C.F.R. § 353.22(e)(1).
Court No. 98-09-02799                                                     Page 10

and   capricious       because    the   instructions    contradicted       prior

instructions directing Customs to assess the duties at the rate

determined      in    the    administrative   review   for     the     importer’s

manufacturer     and    no   other   rate   was   assessed   in   the    review);

Renesas, 2003 Ct. Intl. Trade LEXIS 105 (same).                   Consequently,

Consolidated did not have a reasonable expectation that Commerce

would apply a weighted average of the final results to its imports.

Commerce sent Customs liquidation instructions similar to that

received with respect to Consolidated for imports from all of the

other countries involved in the first review of anti-friction

bearings.

      Therefore, upon review of the record, and the arguments

presented by the parties on remand, the Court finds that the Remand

Redetermination is supported by substantial evidence on the record

and in accordance with law.          Accordingly, it is hereby

      ORDERED that the Remand Redetermination is affirmed in all

respects; and it is further

      ORDERED        that    Commerce   instruct     Customs      to    liquidate

Consolidated’s entries of merchandise according to the direction

outlined in the August 4, 1998, liquidation instructions; and it is

further

      ORDERED that since all other issues have been decided, this
Court No. 98-09-02799                               Page 11

case is dismissed.

                               /s/ Nicholas Tsoucalas
                                NICHOLAS TSOUCALAS
                                   SENIOR JUDGE

Dated:    August 20, 2004
          New York, New York