Skf Usa Inc. v. U.S.

491 F.Supp.2d 1354

SKF USA INC., SKF France S.A., SKF Aerospace France, SKF GmbH and SKF Industrie S.p.A., Plaintiffs, v. UNITED STATES, Defendant, and Timken U.S. Corporation, Defendant-Intervenor.

Slip Op. 07-86.

Court No. 05-00569.

United States Court of International Trade.

May 29, 2007.

COPYRIGHT MATERIAL OMITTED

Steptoe & Johnson LLP, (Herbert C. Shelley, Alice A. Kipel, and Susan R. Gihring), Washington, DC, for Plaintiffs SKF USA Inc., SKF France S.A., SKF Aerospace France, SKF GmbH, and SKF Industrie S.p.A.

Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Claudia Burke); and David W. Richardson, Mykhaylo A. Gryzlov, and Jennifer J. Johnson, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, of Counsel, for Defendant United States.

Stewart and Stewart, (Terence P. Stewart, William A. Fennell, and Geert De Prest), Washington, DC, for Defendant-Intervenor Timken U.S. Corporation.

OPINION

WALLACH, Judge.

I Introduction

Plaintiffs SKF USA Inc., SKF France S.A., SKF Aerospace France, SKF GmbH, and SKF Industrie S.p.A. (collectively "SKF") challenge the United States Department of Commerce's ("Commerce" or "the Department") findings in Ball Bearings and Parts Thereof From France, Germany, Italy, Japan, Singapore and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, 70 Fed.Reg. 54,711 (September 16, 2005) ("Final Results"). The court has jurisdiction pursuant to 28 U.S.C. § 1581(c).

II Background

On September 15, 2005, the Department published in the Federal Register the Final Results of its Fifteenth Review of ball bearings and parts thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom, covering the period of review ("POR") from May 1, 2003 through April 30, 2004. Final Results, 70 Fed. Reg. at 54,711. The review covers ball bearings (other than tapered roller bearings) and parts thereof, specifically antifriction balls, ball bearings with integral shafts, ball bearings (including radial ball bearings) and parts thereof, and housed or mounted ball bearings united and parts thereof.¹ Id. at 54,712. In the Final Results, Commerce found a 8.41% weighted-average dumping margin for SKF France S.A., 16.06% for SKF GmbH, and 2.59% for SKF Industrie S.p.A. Id. at 54,713. SKF does not contest the antidumping margins for bearings affected by the Final Results from the United Kingdom.

Oral argument was held on January 24, 2007.

III Standard of Review

This court will sustain Commerce's determinations, findings, or conclusions unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B); Magnesium Corp. of Am. v. United States, 166 F.3d 1364, 1368 (Fed.Cir.1999). Substantial evidence is "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, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (citing Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). Courts have considered substantial evidence to be something less than the weight of the evidence; the possibility of drawing two inconsistent conclusions from the presented evidence does not necessarily prevent an administrative agency's finding from being supported by substantial evidence. Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 619-20, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citing Labor Board v. Nevada Consol. Copper Corp., 316 U.S. 105, 106, 62 S.Ct. 960, 86 L.Ed. 1305 (1942); Keele Hair & Scalp Specialists, Inc. v. Fed. Trade Comm'n, 275 F.2d 18, 21 (5th Cir.1960)).

The court must use a two-step analysis when evaluating Commerce's statutory interpretation. Chevron U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The court examines, first, whether "Congress has directly spoken to the precise question at issue," in which case courts, "must give effect to the unambiguously expressed intent of Congress." Id.; see also Household Credit Servs. v. Pfennig, 541 U.S. 232, 239, 124 S.Ct. 1741, 158 L.Ed.2d 450 (2004). Whenever Congress has "explicitly left a gap for the agency to fill," the agency's regulation is "given controlling weight unless [it is] arbitrary, capricious, or manifestly contrary to the statute." Chevron, 467 U.S. at 843-44, 104 S.Ct. 2778.

When faced with a problem of statutory construction, this Court shows great deference to the interpretation given the statute by the officers or agency charged with its administration. `To sustain the [agency's] application of this statutory term, we need not find that its construction is the only reasonable one, or even that it is the result we would have reached had the question arisen in the first instance in judicial proceedings.'

Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965) (quoting Unemployment Comp. Comm'n v. Aragon, 329 U.S. 143, 153, 67 S.Ct. 245, 91 L.Ed. 136 (1946)).

IV Discussion

A Commerce's Decision to Revise Its Model-Matching Methodology is Supported by Substantial Evidence and is in Accordance with Law

Plaintiffs argue that Commerce's departure from its previous methodology contravenes its long-standing policy to "`maintain a stable, normal, and predictable approach' with regards to model match, and not to alter that methodology unless compelling reasons exist." Plaintiffs' Rule 56.2 Motion for Judgment Upon the Agency Record ("Plaintiffs' Motion") at 10 (citing Polyethylene Terephthalate Film, Sheet, and Strip from the Republic of Korea; Final Results of Antidumping Duty Administrative Reviews and Notice of Revocation in Part, 61 Fed.Reg. 35,177, 35,181 (July 5, 1996) ("Polyethylene")). Plaintiffs contend that Commerce's decision to change the model match methodology retroactively unfairly deprived Plaintiffs of outcome predictability and that Commerce's justification for changing the methodology departs from its own criteria that sets out when it is appropriate to change a model match methodology. Id.²

Specifically, Plaintiffs argue that Commerce created a methodology inconsistent with the principle that model match methodologies reflect market place realities. Id. at 12. Plaintiffs claim that Commerce has not gained any additional expertise or knowledge of market demand or market realities and that recognizing differences in types of lubricant reflects a misunderstanding of market realities. Id. at 12-13. Plaintiffs also argue that Commerce violated its normal practice of refraining from altering model match criteria absent evidence that the methodology does not properly reflect the product in question, there have been industry changes to the product, or there are other compelling reasons. Id. at 11 (citing Stainless Steel, 70 Fed.Reg. at 73,731; Carbon Steel, 71 Fed.Reg. at 7,514). Plaintiffs assert that there have been no changes to the products or the industry such that the "family" match methodology previously used no longer reflects the subject merchandise and Commerce has failed to articulate any compelling reason for the change. Id. at 14. Plaintiffs contend that Commerce's reasons for changing the methodology, technological advancements and increased accuracy, are insufficient and that Commerce has nevertheless failed to show that the new methodology results in increased accuracy. Id. at 14, 18.

Defendant concedes that during the Second Administrative Review Commerce decided to continue applying the family method, but notes that it stated it would continue to evaluate the appropriateness of the method and make alterations when compelling reasons exist. Defendant's Response in Opposition to Plaintiffs' Motion for Judgment Upon the Agency Record ("Defendant's Response") at 5-6. Timken U.S. Corporation urged Commerce to alter its model match methodology during the Fourteenth Administrative Review and Commerce determined at that time that compelling reasons did exist for a modification. Id. at 6 (citing Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France; et al.; Final Results of Antidumping Duty Administrative Reviews, 57 Fed.Reg. 28,360, cmt.1 (June 24, 1992)). "Specifically, Commerce determined that a revised methodology: 1) more accurately reflected the intent of 19 U.S.C. § 1677(16),³ including the statute's preference for identifying foreign like product by selecting the single most similar product; 2) reflected the statutory preference for using price-to-price comparisons; and 3) enabled Commerce to take advantage of technological developments." Id. (citing Memorandum from Jeffrey A. May, Deputy Assistant Sec'y for Import Admin., U.S. Dep't of Commerce, to James J. Jochum, Assistant Sec'y for Import Admin., U.S. Dep't of Commerce, at 4-5 (December 3, 2003) ("Model Match Memo")). Defendant asserts that because there is sufficient evidence to support these findings, the change was reasonable and should be sustained by this court. Id. at 16.

Defendant asserts that by using the new method Commerce can identify the single most similar product because "Commerce can now capture slight differences in the physical characteristics of the home market and United States model being compared which are still similar enough to be considered for comparison." Id. at 18. Defendant also argues that Commerce is not required "to ensure that home market models are technically substitutable, purchased by the same type of customers, or applied to the same end as the U.S. model." Id. at 18 (citing Memorandum from Barbara E. Tillman, Acting Deputy Assistant Sec'y for Import Admin., U.S. Dep't of Commerce, to Ronald K. Lorentzen Acting Assistant Sec'y for Import Admin., U.S. Dep't of Commerce, Issues and Decision Memorandum for the Antidumping Duty Administrative Reviews of Ball Bearings and Parts Thereof from France,...