Court Opinion

ID: 818985
Source: CourtListenerOpinion
Date Created: 2013-02-04 06:01:11.712602+00
Date Added: 2024-06-11T09:38:22.337766
License: Public Domain

Slip Op. 03-12

           UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
                                    :
FAG ITALIA S.p.A. and FAG BEARINGS :
CORPORATION; SKF USA INC. and       :
SKF INDUSTRIE S.p.A.,               :
                                    :
          Plaintiffs and            :
          Defendant-Intervenors,    :
                                    :
          v.                        :
                                    :   Consol. Court No.
UNITED STATES,                      :   97-11-01984
                                    :
          Defendant,                :
                                    :
          and                       :
                                    :
THE TORRINGTON COMPANY,             :
                                    :
          Defendant-Intervenor      :
          and Plaintiff.            :
___________________________________:

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

     Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Max
F. Schutzman, Andrew B. Schroth, Mark E. Pardo and Adam M. Dambrov)
for FAG Italia S.p.A. and FAG Bearings Corporation, plaintiffs and
defendant-intervenors.

     Steptoe & Johnson LLP (Herbert C. Shelley, Alice A. Kipel and
Anne Talbot) for SKF USA Inc. and SKF Industrie S.p.A., plaintiffs
and defendant-intervenors.

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

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

                                           Dated: January 30, 2003
Consol. Court No. 97-11-01984                                              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 August 7, 2002, this Court issued an order directing the

United   States    Department       of   Commerce,     International       Trade

Administration (“Commerce”), to explain “why [Commerce] uses a

different definition of ‘foreign like product’ for price-based

calculations for normal value [“NV”] than [Commerce] does for

calculations of constructed value [“CV”].”             FAG Italia, S.p.A. v

United States (“FAG Italia III”), 26 CIT ___, ___, Ct. No. 97-11-
Consol. Court No. 97-11-01984                                                   Page 3

01984,      2002   WL   1818086,     at    *1   (CIT   Aug.    7,    2002)   (citation

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

Appeals for the Federal Circuit (“CAFC”) in FAG Italia S.p.A. v.

United States (“FAG Italia II”), 291 F.3d 806 (Fed. Cir. 2002),

vacating-in-part the judgment of this Court in                      FAG Italia S.p.A.

v. United States (“FAG Italia I”), 24 CIT ___, 2000 WL 978462 (CIT

July 13, 2000).         The CAFC based its decision in              FAG Italia 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

FAG Italia I, FAG Italia II and subject to the order of FAG Italia

III,       is   entitled   Amended    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”), 62 Fed. Reg. 61,963 (Nov. 20, 1997).

       On November 7, 2002, Commerce, pursuant to this Court’s order

in FAG Italia III, submitted its Final Results of Redetermination

Pursuant to Court Remand (“Remand Results”).1                         In particular,

Commerce: (1) set forth the pertinent factual background of its (a)

model-match        process,   and    (b)    constructed       value    (“CV”)   profit

       1
          Prior to the final Remand Results, Commerce released the
draft results of redetermination on October 17, 2002. FAG Italia
S.p.A. and FAG Bearings Corporation (“FAG”) and SKF USA Inc. and
SKF Industrie S.p.A. (“SKF”) submitted comments to draft Remand
Results on October 29, 2002, and October 30, 2002, respectively.
Consol. Court No. 97-11-01984                                  Page 4

methodology; (2) explained its application of the term “foreign

like product,” in addition to addressing the contentions raised by

FAG regarding this term; and (3) explained why its CV profit

methodology comports with statutory requirements.

       On December 6, 2002, FAG filed comments to the Remand Results

with    this   Court.     Commerce   and   The   Torrington   Company

(“Torrington”) later submitted rebuttal comments on December 20,

2002.    SKF has not submitted any formal comments to this Court.

III. Contentions of the Parties

       FAG contends that Commerce failed to comply with FAG Italia II

and FAG Italia III because Commerce 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

NV price-based calculations.

       Relying on the CAFC’s holding in SKF USA, 263 F.3d at 1382-83,

FAG argues that Commerce must overcome a strong presumption that

the same definition of the term “foreign like product” be employed

throughout the same antidumping proceeding.      FAG interprets the

CAFC’s holding to mean that Commerce, in order to successfully

overcome this presumption, must provide an explanation that is

“completely novel.” FAG attacks several arguments made by Commerce

in the Remand Results in an attempt to show that Commerce has not
Consol. Court No. 97-11-01984                                        Page 5

met its burden to provide a reasonable explanation regarding its

use of differing definitions for the same statutory term.

      FAG first raises issue with Commerce’s argument that employing

an identical definition of “foreign like product” for both NV and

CV   profit    calculations    will   render   the   preferred   method   for

calculating CV, found under 19 U.S.C. § 1677b(e)(2)(A) (1994),

inapplicable.      FAG asserts that this argument is flawed because

Commerce is restricted in choosing comparison sales that are

contemporaneous when calculating NV; a requirement that is not

imposed on Commerce when calculating CV profit. Accordingly, sales

of the foreign like product exist upon which Commerce can base its

CV profit calculation.

      Second, FAG attacks Commerce’s contention that the use of

aggregate foreign like products for the viability test conducted

under   19    U.S.C.   §   1677b(a)(1)(C)   (1994)   justifies   Commerce’s

application of different definitions for the same statutorily

defined term.     According to Commerce, the statute, on its face, is

concerned with aggregate amounts of the foreign like product.

Therefore, Commerce’s argument that the phrase “aggregate quantity”

does not authorize Commerce to calculate an aggregate of foreign

like products defies logic and should be rejected.               FAG, using

analogous logic, rejects Commerce’s explanation of its country-wide

below cost sales test and urges the Court to do the same.
Consol. Court No. 97-11-01984                                                  Page 6

     Third, FAG argues that the contemporaneity rule, under 19

U.S.C. § 1677b(a)(1)(A) (1994),2 has no bearing on Commerce’s use

of the same definition of “foreign like product.”                    According to

FAG, the specific language distinguishing a time element in the

contemporaneity rule does not appear in any statutory definition of

the term “foreign like product” under 19 U.S.C. § 1677(16) (1994)

and, therefore, Commerce cannot read such a requirement into the

statute.      Moreover,        FAG     contends    that      Commerce’s     current

methodology for calculating CV profit does not accord to any

contemporaneity requirement, although Commerce implies so in the

Remand Results.

     Commerce responds that it has met the mandate set out by the

CAFC in FAG Italia II, providing reasonable explanations why

Commerce    uses   different         definitions    of    the    same   term    when

calculating   NV    and   CV   profit.       See    Def.’s      Rebuttal   Comments

Regarding   the    Remand   Results      Pursuant    to    Ct.    Remand   at   1-2.

Commerce contends that the Court must decide whether Commerce

reasonably interpreted the antidumping statute with regards to

implementing differing definitions of the same term in the same

proceeding, and that the issue is one of weighing the statute’s

    2
          The contemporaneity rule states that “[t]he normal value
of the subject merchandise shall be the price described in [19
U.S.C. § 1677b(a)(B)], at a time reasonably corresponding to the
time of the sale used to determine export price or constructed
export price under [19 U.S.C. § 1677a(a) or (b)].” 19 U.S.C. §
1677b(a)(1)(A).
Consol. Court No. 97-11-01984                                           Page 7

legislative history and the factual context in which the statute

was applied.      According to Commerce, FAG presents a criticism of

Commerce’s   explanations     without    evidence     supporting     that   such

explanations were, in fact, unreasonable.            See id. at 5.    Commerce

also   offers     further   explanations    to   show   how   the    viability

provision and country-wide cost allegation validate Commerce’s use

of differing definitions of the term “foreign like product.”                 See

id. at. 6-9.

       Torrington generally agrees with Commerce and considers the

arguments presented by FAG unconvincing.         According to Torrington,

the CAFC in FAG Italia II did not find Commerce’s statutory

interpretation     unreasonable,   but     instead    required   Commerce    to

provide further explanation.       See Rebuttal Comments of Torrington

at 5. Torrington asserts that Commerce provided such explanations.

See id.

IV.    Analysis

       The CAFC in FAG Italia II, 291 F.3d at 808, followed its prior

holding in SFK USA, 263 F.3d at 1382, regarding the issue of

whether “[Commerce] properly defined ‘foreign like product’ for

purposes of 19 U.S.C. §§ 1677b(a)(1) and 1677b(e).” FAG Italia II,

291 F.3d at 808.      The CAFC has held that since Congress used the

term “foreign like product” in various sections of the antidumping
Consol. Court No. 97-11-01984                                            Page 8

statute and specifically defines the term in 19 U.S.C. § 1677(16),

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
      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.

SKF USA, 263 F.3d at 1382.          In SKF USA, 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

FAG   Italia   II,   this   Court    ordered    Commerce   to    explain   its

methodology for the calculation of CV profit and explain why the

methodology comported with statutory requirements.              See FAG Italia

III, 26 CIT at ___, 2002 WL 1818086 at *1.

      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-
Consol. Court No. 97-11-01984                                        Page 9

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 8.

Commerce detailed its calculation of CV, which Commerce derived by

adhering to 19 U.S.C. § 1677b(e), and later explained why Commerce

“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”)3 establish that only when “no above-

     3
          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 . . .
                                                        (continued...)
Consol. Court No. 97-11-01984                                     Page 10

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

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

(...continued)
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”).
Consol. Court No. 97-11-01984                                          Page 11

practice of deriving different values, including NV.                See id. at

12-15.   In determining the viability of a comparison market for NV

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

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

under § 1677(16)(C).          See id. at 15-18.       To find foreign like

products that 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 id. at 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 18-20.

     Contrary to the contentions espoused by FAG, 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
Consol. Court No. 98-09-02799                                          Page 12

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 with the statute

on a whole.     Accordingly, Commerce followed the mandate of FAG

Italia 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   FAG.

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 30, 2003
           New York, New York
                             Erratum

Slip Opinion 03-12

FAG Italia S.p.A. v. United States, Consol. Court No. 97-11-01984

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

February 5, 2003.