Consol. Bearings Co. v. United States , 2004 CIT 107 ( 2004 )

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