Skf Usa Inc. v. U.S.

675 F.Supp.2d 1264

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

Slip Op. 09-148.

Court No. 08-00322.

United States Court of International Trade.

December 21, 2009.

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Steptoe & Johnson LLP (Herbert C. Shelley, Alice A. Kipel, Susan R. Gihring, and Laura R. Ardito) for plaintiffs.

Tony West, Assistant Attorney General, Jeanne E. Davidson, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (L. Misha Preheim); Joanna V. Theiss, Office of the Chief Counsel for Import Administration, United States Department of Commerce, of counsel, for defendant.

Stewart and Stewart (Geert M. De Prest, Terence P. Stewart, William A. Fennell, and Lane S. Hurewitz) for defendant-intervenor.

OPINION AND ORDER

STANCEU, Judge.

Plaintiffs SKF USA Inc., SKF France S.A., SKF Aerospace France S.A.S., SKF GmbH, and SKF Industrie S.p.A. (collectively, "SKF" or "plaintiffs") contest a final determination that the International Trade Administration, United States Department of Commerce ("Commerce" or the "Department") issued in the eighteenth administrative reviews of antidumping duty orders on ball bearings and parts thereof from France, Germany, Italy, Japan, and the United Kingdom (the "Final Results"). Plaintiffs claim, first, that Commerce acted contrary to law in requesting actual cost of production ("COP") data for use in determining the constructed value ("CV") of subject merchandise that SKF GmbH purchased from an unrelated manufacturer of ball bearings and exported to the United States. Second, plaintiffs claim that Commerce unlawfully invoked facts otherwise available and drew an adverse inference after plaintiffs' unaffiliated supplier failed to submit timely the COP data that Commerce had requested. Third, plaintiffs object to Commerce's use of "zeroing" methodology to calculate their dumping margins in the reviews, under which Commerce, when calculating a weighted-average dumping margin, deems sales of subject merchandise made in the United States at prices above normal value to have individual dumping margins of zero rather than negative margins. In their fourth claim, plaintiffs challenge the Department's decision to issue duty assessment and liquidation instructions to United States Customs and Border Protection ("Customs" or "CBP") fifteen days after the publication of the final results of the administrative reviews.

On plaintiffs' first claim, the court concludes that Commerce acted lawfully in requesting and obtaining COP data from plaintiffs' unaffiliated supplier to calculate the constructed value of the merchandise obtained from that supplier. The court concludes, however, that Commerce acted contrary to law in drawing an inference adverse to SKF GmbH upon the failure of the unaffiliated supplier to make a timely submission of the requested COP data. With respect to plaintiffs' third claim, the court affirms the Department's use of the zeroing methodology as used in the eighteenth administrative reviews. As to plaintiffs' fourth claim, the court concludes that Commerce's policy, rule, or practice of issuing liquidation instructions fifteen days after publication of the final results of an administrative review, which it stated in the Federal Register notice announcing the Final Results and in Federal Register notices pertaining to other reviews of antidumping duty orders, was not in accordance with law.

I. BACKGROUND

Pursuant to 19 U.S.C. § 1675(a) (2006), Commerce initiated the eighteenth administrative reviews of the antidumping duty orders on imports of ball bearings and parts thereof from France, Germany, Italy, Japan, and the United Kingdom, for the period May 1, 2006 through April 30, 2007 (the "period of review" or "POR"). See Initiation of Antidumping & Countervailing Duty Admin. Reviews, Request for Revocation in Part & Deferral of Admin. Review, 72 Fed.Reg. 35,690 (June 29, 2007). On May 7, 2008, Commerce published the preliminary results of the administrative reviews. Ball Bearings & Parts Thereof from France, Germany, Italy, Japan, & the United Kingdom: Prelim. Results of Antidumping Duty Admin. Reviews & Intent to Rescind Reviews in Part, 73 Fed.Reg. 25,654 (May 7, 2008) ("Prelim. Results"). On September 11, 2008, Commerce issued the contested determination. Ball Bearings & Parts Thereof from France, Germany, Italy, Japan, & the United Kingdom: Final Results of Antidumping Duty Admin. Reviews & Rescission of Reviews in Part, 73 Fed.Reg. 52,823 (Sept. 11, 2008) ("Final Results"). In the Final Results, Commerce assigned to SKF GmbH a weighted-average dumping margin of 4.15%. Final Results, 73 Fed.Reg. at 52,825. In calculating the 4.15% rate, Commerce, invoking facts otherwise available and an adverse inference pursuant to 19 U.S.C. § 1677e (2006), applied a rate of 17.66% to the sales of subject merchandise that SKF GmbH purchased from the unaffiliated supplier because requested COP information pertaining to that supplier was not timely submitted to Commerce during the review. Id. at 52,824; Issues & Decision Mem. for the Antidumping Duty Admin. Reviews of Ball Bearings & Parts Thereof from France, Germany, Italy, Japan, & the United Kingdom for the Period of Review May 1, 2006, through April 30, 2007, at 57 (Sept. 4, 2008) ("Decision Mem."). Also, in the Final Results, Commerce calculated SKF GmbH's weighted-average dumping margin by assigning dumping margins of zero to individual sales made in the United States at prices above normal value. Final Results, 73 Fed.Reg. at 52,826; Decision Mem. 10. Before the court is plaintiffs' motion under USCIT Rule 56.2 for judgment upon the agency record, in which plaintiffs seek a remand directing Commerce to redetermine SKF GmbH's weighted-average dumping margin without using COP data from the unaffiliated ball bearing supplier, without utilizing facts otherwise available or an adverse inference, and without zeroing negative antidumping margins. Also before the court is plaintiffs' motion for judgment upon the agency record under USCIT Rule 56.1 challenging the Department's decision to issue liquidation instructions to Customs fifteen days after the publication of the Final Results, which it announced in the Federal Register notice by which it published the Final Results. Final Results, 73 Fed.Reg. at 52,825.

II. DISCUSSION

The court exercises subject matter jurisdiction under 28 U.S.C. § 1581(c) (2006) in adjudicating plaintiffs' claims challenging the Department's request for the unaffiliated supplier's COP data to determine constructed value, the Department's application of facts otherwise available with an adverse inference, and the Department's reliance on zeroing methodology. 28 U.S.C. § 1581(c). According to 28 U.S.C. § 1581(c), the court has jurisdiction to review actions commenced under 19 U.S.C. § 1516a (2006), including an action contesting a final determination in an administrative review issued under 19 U.S.C. § 1675(a). See id. In adjudicating each of these three claims, the court will hold unlawful a determination, finding, or conclusion found to be unsupported by substantial evidence on the record or otherwise not in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B)(i).

The court exercises subject matter jurisdiction under 28 U.S.C. § 1581(i) over plaintiffs' claim challenging the Department's decision to issue liquidation instructions to implement the Final Results fifteen days after publication of the Federal Register notice. See 28 U.S.C. § 1581(i); SKF USA Inc. v. United States, 31 CIT 405, 409-10 (2007) ("SKF I") (citing Shinyei Corp. of Am. v. United States, 355 F.3d 1297, 1304-05 (Fed.Cir.2004), and Consol. Bearings Co. v. United States, 348 F.3d 997, 1002-03 (Fed.Cir.2003)).¹ The court reviews the fifteen-day policy as provided in 5 U.S.C. § 706 (2006). 28 U.S.C. § 2640(e) (2006). Under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706, the court must "hold unlawful and set aside agency action . . . found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A).

A. Commerce Lawfully Sought to Obtain the Unaffiliated Supplier's Data on Cost of Production

During the review, Commerce requested that all respondents report COP data for imports of subject bearings. See Dep't of Commerce, Request for Information (Aug. 14, 2007) (Gen. Iss. AR Doc. 22). On September 4, 2007, SKF GmbH responded by submitting its own acquisition costs for bearings it obtained from an unrelated supplier. Letter from Steptoe & Johnson LLP to Commerce (Sept. 4, 2007) (Admin.R.Doc. No. 90). On November 6, 2007, the Department requested that SKF GmbH "report actual COP and CV data from the unaffiliated supplier which was the largest supplier, measured by the value of SKF's [i.e., SKF GmbH's] U.S. sales." Mem. from Program Manager AD/CVD Enforcement, to Dir., Office 5, AD/CVD Enforcement 2 (Nov. 6, 2007) (Admin.R.Doc. No. 105). Commerce's rationale was that a substantial portion of SKF GmbH's U.S. sales and some of its home market sales were sales of merchandise produced by unaffiliated suppliers. Id.

SKF objected that Commerce was departing from its previous methodology of relying on SKF GmbH's acquisition costs in determining the constructed value for subject bearings.² See Letter from Steptoe & Johnson LLP to Commerce (Nov. 14, 2007) (Admin.R.Doc. No. 107). Commerce concluded that "we continue to find that requiring cost data from unaffiliated suppliers produces more accurate COP and CV information, as acquisition costs alone do not capture all of the actual costs of the manufacturer supplying the bearings to the reseller." Decision Mem. 59.

Plaintiffs argue that it was unlawful for Commerce to depart from the...