Consol. Bearings Co. v. United States

2004 CIT 107

• Court: United States Court of International Trade
• Decided: August 20, 2004
• Docket: 98-02799
• Status: Published

Opinion

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