United States Court of Appeals for the Federal Circuit
04-1556
CONSOLIDATED BEARINGS COMPANY,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
Christopher R. Wall, Pillsbury Winthrop Shaw Pittman LLP, of Washington, DC,
argued for plaintiff-appellant. With him on the brief was William DeVinney.
Cristina Ashworth, Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, of Washington, DC, argued for defendant-appellee. On
the brief were Peter D. Keisler, Assistant Attorney General; David M. Cohen, Director;
Jeanne E. Davidson, Deputy Director; and David Silverbrand, Trial Attorney. Of counsel
on the brief were John D. McInerney, Chief Counsel, Berniece A. Browne, Senior
Counsel, and Patrick V. Gallagher, Jr., Senior Attorney, Office of Chief Counsel for
Import Administration, United States Department of Commerce, of Washington, DC.
Appealed from: United States Court of International Trade
Senior Judge Nicholas Tsoucalas
United States Court of Appeals for the Federal Circuit
04-1556
CONSOLIDATED BEARINGS COMPANY,
Plaintiff-Appellant,
v.
UNITED STATES,
Defendant-Appellee.
___________________________
DECIDED: June 21, 2005
___________________________
Before CLEVENGER, RADER, and DYK, Circuit Judges.
CLEVENGER, Circuit Judge.
Plaintiff-appellant Consolidated Bearings Company ("Consolidated") appeals the
United States Court of International Trade's decision affirming the final results of a
redetermination by the Department of Commerce ("Commerce") pursuant to a remand
order from the Court of International Trade. See Consol. Bearings Co. v. United States,
346 F. Supp. 2d 1343 (Ct. Int'l Trade 2004). In the final results, Commerce determined
that it did not depart from a consistent past practice by instructing the United States
Customs Service ("Customs") to liquidate Consolidated's unreviewed entries of
antifriction bearings ("AFBs") from an unrelated reseller at the original cash deposit rate
rather than the manufacturer's rate established pursuant to an administrative review.
Final Results of Redetermination Pursuant to Court Remand, slip op. 04-10, at 6
(Apr. 28, 2004) ("Remand Redetermination"). Because substantial evidence supports
Commerce's determination that it has in the past consistently liquidated unreviewed
entries from an unrelated reseller at the cash deposit rate when the manufacturer has
no knowledge that the subject merchandise is ultimately destined for the United States,
we affirm the Court of International Trade's judgment.
I
In 1989, after determining that certain imported AFBs were being sold below fair
value in the United States to the detriment of domestic industry, Commerce issued
antidumping duty orders concerning AFBs exported from several countries, including
Germany. See Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings,
and Spherical Plain Bearings and Parts Thereof From the Federal Republic of
Germany, 54 Fed. Reg. 20,900 (May 15, 1989). Between 1989 and 1997, Consolidated
purchased and imported from an unaffiliated foreign reseller AFBs manufactured by
FAG Kugelfischer Georg Schaefer KgaA ("FAG"). Consolidated consequently paid
cash deposits of estimated antidumping duties based on the rates Commerce assigned
to FAG in the antidumping duty orders concerning AFBs.
After receiving requests from domestic importers for an administrative review of
the antidumping duty order applicable to AFB imports from FAG and others, Commerce
initiated an administrative review on June 11, 1990. See Antifriction Bearings (Other
Than Tapered Roller Bearings) and Parts Thereof From the Federal Republic of
Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand and the United
Kingdom Initiation of Antidumping Administrative Reviews, 55 Fed. Reg. 23,575 (June
11, 1990). Because Consolidated did not request an administrative review for the
04-1556 2
reseller's sales to Consolidated, and neither Consolidated nor the reseller participated in
the review, Commerce did not consider Consolidated's entries of AFBs in the review.
On July 11, 1991, Commerce published the final results of the administrative
review and stated that "[w]ith respect to companies not participating in this review,
presumably all interested parties were satisfied with the previously published cash
deposit rates for assessment purposes." Antifriction Bearings (Other Than Tapered
Roller Bearings) and Parts Thereof from the Federal Republic of Germany; Final
Results of Antidumping Duty Administrative Review, 56 Fed. Reg. 31,692, 31,700 (July
11, 1991). Commerce ultimately amended the results to include weighted-average
antidumping duty rates for various exporters, including one for FAG. Antifriction
Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From Germany; et
al.; Amended Final Results of Antidumping Duty Administrative Reviews, 62 Fed. Reg.
32,755, 32,756 (June 17, 1997). Under these final results, each participating importer
of FAG-manufactured AFBs received a new duty rate.
On September 9, 1997, Commerce instructed Customs to liquidate AFBs
pursuant to the final results of the administrative review. See Liquidation Instructions for
Antifriction Bearings (Other than Tapered Roller Bearings) & Parts Thereof From
Germany, Message No. 7252113 (Sept. 9, 1997) ("September 1997 instructions").
Because Consolidated did not participate in the review, the final results did not include a
new antidumping duty rate for Consolidated or its reseller. On August 4, 1998,
Commerce again instructed Customs that if it was "still suspending liquidation on any
entries of AFBs from Germany . . . after applying all of the above liquidation instructions,
[it] should now liquidate such entries at the deposit rate required at the time of entry of
04-1556 3
the merchandise"—a rate higher than that set forth in the September 1997 liquidation
instructions for named importers of AFBs manufactured by FAG. Liquidation
Instructions for AFBs and Parts Thereof from Germany from the Period 11/9/88 Through
4/30/90, Message No. 8216117 (Aug. 4, 1998) ("August 1998 instructions").
Commerce thereafter liquidated Consolidated's imports of AFBs at the cash deposit
rate.
Consolidated filed suit pursuant to 28 U.S.C. § 1581(i) in the Court of
International Trade, seeking to invalidate the August 1998 instructions. See Consol.
Bearings Co. v. United States, 166 F. Supp. 2d 580 (Ct. Int'l Trade 2001). The case
was ultimately appealed to this court, and we held that 19 U.S.C. § 1675(a)(2)(C)—
which explains that a determination of antidumping duties in an administrative review
shall "be the basis for the assessment of . . . antidumping duties on entries of
merchandise covered by the determination and for deposits of estimated duties"—does
not afford an importer a statutory right to have the results of an administrative review
applied to its entries if Commerce did not consider the entries in the review. Consol.
Bearings Co. v. United States, 348 F.3d 997, 1005-06 (Fed. Cir. 2003). We
nonetheless remanded the case for a determination of whether "Commerce had a
consistent past-practice with respect to imports from unrelated resellers not covered by
the administrative review, whether there was any departure in this case from a
consistent past practice, and whether that departure was arbitrary." Id. at 1008. The
Court of International Trade in turn remanded the case to Commerce. See Consol.
Bearings Co. v. United States, No. 98-09-02799 (Ct. Int'l Trade Jan. 30, 2004).
04-1556 4
Upon remand, Commerce identified its past practice with respect to unaffiliated
resellers as follows:
The Department's 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. If the request for review is made for a
reseller and its supplier does not know that the reseller is exporting the
merchandise to the United States, then the Department will calculate a
rate for the reseller based on the reseller's pertinent sales made during the
period of review. If a request for review is not made for the reseller,
however, then the Department treats the reseller as any unreviewed
company and assesses a duty at the rate required on the merchandise at
the time of entry . . . .
Remand Redetermination at 6 (citation omitted).
The Court of International Trade upheld Commerce’s assessment of its past
consistent practice and ruled that Consolidated's imports were dutiable at the cash
deposit rate. Consol. Bearings, 346 F. Supp. 2d at 1347-48. The Court of International
Trade further determined that Commerce in the past has deviated from this practice
only when both of the following factors were present: (1) the importer did not participate
in the administrative review; and (2) no rate other than the manufacturer’s review rate
was assessed by Commerce in the review proceedings. Id. at 1347. Because
Commerce assessed rates other than the manufacturer's review rate to other resellers,
the Court of International Trade determined that a departure by Commerce from its past
consistent practice to accommodate Consolidated was not warranted. Id. Consolidated
appeals. We have jurisdiction over the appeal pursuant to 28 U.S.C. § 1295(a)(5)
(2000).
04-1556 5
II
In reviewing decisions by the Court of International Trade in actions pursuant to
28 U.S.C. § 1581(i), we apply the standard of review set forth in the APA and will "hold
unlawful and set aside agency action, findings, and conclusions found to be . . .
arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."
5 U.S.C. § 706(2); Humane Soc'y of the United States v. Clinton, 236 F.3d 1320, 1324
(Fed. Cir. 2001) ("[T]his Court will apply the standard of review set forth in 5 U.S.C.
§ 706 to an action instituted pursuant to 28 U.S.C. § 1581(i)."). "An abuse of discretion
occurs where the decision is based on an erroneous interpretation of the law, on factual
findings that are not supported by substantial evidence, or represents an unreasonable
judgment in weighing relevant factors." Star Fruits S.N.C. v. United States, 393 F.3d
1277, 1281 (Fed. Cir. 2005).
"Substantial evidence" describes "such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion." Consol. Edison Co. v. Nat'l Labor
Relations Bd., 305 U.S. 197, 229 (1938). To determine if substantial evidence exists,
we review the record in its entirety, including all evidence that "fairly detracts from the
substantiality of the evidence." Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562
(Fed. Cir. 1984).
III
The case is now before us for the limited purpose of determining whether
substantial evidence supports Commerce's finding that its August 1998 instructions to
Customs reflect a consistent past practice of liquidating unreviewed entries from
unrelated resellers at the cash deposit rate rather than the manufacturer's review rate,
04-1556 6
provided that the manufacturer does not have knowledge that its sales to the reseller
are ultimately destined for the United States, or instead are an unjustified departure
from a contrary past practice without reasonable explanation. It was Consolidated's
burden on remand to prove the latter. See Consol. Bearings, 348 F.3d at 1007 ("In
order to show that the 1998 instructions were arbitrary and capricious, Consolidated
must show that Commerce consistently followed a contrary practice in similar
circumstances and provided no reasonable explanation for the change in practice.").
Upon considering all of the evidence set forth by Commerce in its Remand
Redetermination, and all of the evidence presented by Consolidated, we conclude that
Commerce did not arbitrarily depart from a past practice of liquidating unreviewed
entries at the cash deposit rate rather than the manufacturer's review rate.
A
Commerce first calls attention to the distinction in 19 C.F.R. § 353.22(e)(1)
(1995) between reviewed and unreviewed entries. During the relevant time period,
subsection 353.22(e)(1) read as follows:
[I]f [Commerce] does not receive a timely request [for an administrative
review], [Commerce] . . . will instruct the Customs Service to assess
antidumping duties on the merchandise . . . at rates equal to the cash
deposit of . . . estimated antidumping duties required on that merchandise
at the time of entry . . . .
19 C.F.R. § 353.22(e)(1) (1995). The existence of a regulation does not, by itself,
establish that Commerce consistently acted according to its terms. Subsection
353.22(e)(1) does, however, shed light on what Commerce during the relevant time
period publicized its practice to be. In light of our determination in Consolidated
Bearings that 19 U.S.C. § 1675 does not afford an importer statutory entitlement to use
04-1556 7
of the results of an administrative review as the basis for Commerce's assessment of
duties on the importer's unreviewed entries, 348 F.3d at 1006, the meaning behind
subsection 353.22(e)(1) is clear. Commerce's past practice, at least as described by
the regulation, was to liquidate unreviewed entries at the cash deposit rate.
Commerce next states that its practice of assessing antidumping duties on an
importer-specific basis was described in the preliminary and final decision notices in the
present case, both of which issued well before the August 1998 instructions at issue.
See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From
the Federal Republic of Germany; Final Results of Antidumping Duty Administrative
Review, 56 Fed. Reg. 31,692, 31,694 (July 11, 1991) ("[W]e will calculate wherever
possible an exporter/importer-specific assessment rate [which will] . . . be assessed
uniformly on all entries of the class or kind of merchandise by that particular importer
during the review period."); Antifriction Bearings (Other Than Tapered Roller Bearings)
and Parts Thereof from the Federal Republic of Germany; Preliminary Results of
Antidumping Duty Administrative Reviews and Partial Termination of Administrative
Reviews, 56 Fed. Reg. 11,200, 11,201 (Mar. 15, 1991) ("[W]e will calculate an importer-
specific ad valorem appraisement rate for each class or kind of antifriction bearings
[which] . . . will be assessed uniformly on all entries of that particular importer made
during the review period."). We agree with Commerce that the notices are consistent
with our interpretation of subsection 353.22(e)(1)—i.e., that the notices reflect
Commerce's intention to calculate duty rates on an importer-specific basis and
Commerce's focus on a given importer's entries of AFBs in calculating and assessing
the duties.
04-1556 8
Commerce finally offers five actual instructions to Customs to liquidate entries
from unreviewed resellers involved in the review of AFBs from France, Japan,
Singapore, Sweden and the United Kingdom at the cash deposit rate. The following
instruction is representative:
If you are still suspending liquidation on any entries of AFBs from France
during the period 11/9/88 through 4/30/90 after applying all of the above
liquidation instructions, you should now liquidate such entries at the
deposit rate required at the time of entry of the merchandise.
(App. at 141.) As Consolidated correctly observes, the five instructions pertain to the
same administrative review of AFBs that brought about the instructions at issue here.
There is no doubt, however, that they were issued prior to the August 1998 instructions
pertaining to Consolidated's entries in this case. In light of the regulatory context
provided by subsection 353.22(e)(1) and the lack of any evidence to the contrary, we
determine the instructions to be substantial evidence that Commerce's past practice
was to liquidate at the cash deposit rate rather than at the manufacturer's review rate all
entries not reviewed by Commerce in an administrative review, provided that the
manufacturer had no knowledge of the ultimate destination of the subject merchandise.
We further agree with the Court of International Trade that Commerce did not arbitrarily
depart from that practice here.
B
For its part, Consolidated first points in the record to over one hundred pages of
liquidation instructions issued by Commerce to Customs. But Consolidated does little to
explain the relevance of any of the instructions beyond an assertion that many provide
for the liquidation of "all" subject entries, and that "all" means exactly that—every entry
from the manufacturer, regardless of whether it was reviewed. Upon review of the
04-1556 9
instructions, however, we determine that there simply is no suggestion in any of them
that Commerce intended to apply the results of the review of a particular producer to the
unreviewed exports of a reseller—no suggestion that "all" encompasses something
more than all entries actually reviewed by Commerce in arriving at a final dumping
margin determination.
Consolidated also makes much of the Court of International Trade's findings in
Nissei Sangyo America, Ltd. v. United States, No. 00-00113, 2003 WL 21972722 (Ct.
Int'l Trade Aug. 18, 2003), Renesas Technology America, Inc. v. United States,
No. 00-00114, 2003 WL 21972721 (Ct. Int'l Trade Aug. 18, 2003), and ABC
International Traders, Inc. v. United States, 19 C.I.T. 787 (1995), arguing that the court
therein found that Commerce has in the past applied a final determination of a
manufacturer's dumping margin for particular merchandise to all importers of such
merchandise, regardless of whether the importer participated in the administrative
review. While the Court of International Trade expressly found in Nissei and Renesas
that Commerce "changed its past practice of liquidating at the rate established for the
most recent period for the manufacturer of the merchandise," Nissei, 2003 WL
21972722, at *6 (quotation omitted); see also Renesas, 2003 WL 21972721, at *6, prior
decisions by the Court of International Trade do not constitute evidence of Commerce's
past practice and are not binding on this court. Furthermore, the Court of International
Trade in ABC International rejected the importer's attempts to establish that the
Japanese manufacturers at issue in the case had no knowledge of the ultimate
destination of their merchandise, and therefore at least implicitly recognized the import
to Commerce's antidumping duty calculus of the manufacturer's knowledge of the
04-1556 10
ultimate destination of subject merchandise. But to the extent that these cases offer
some support for the conclusion sought by Consolidated on appeal, we disagree with
the findings therein and hold to the contrary that the Court of International Trade did not
err in affirming Commerce's determination that it has consistently liquidated unreviewed
entries from unrelated resellers at the cash deposit rate.
Finally, Consolidated complains that Commerce did not affirmatively act to
provide Consolidated with access to "non-public files" containing Commerce's past
instructions to Customs in other cases. Specifically, Consolidated argues that
"Commerce should have requested permission to release confidential information" and
that "Commerce has not offered any evidence, or even any argument, why obtaining
such permission would be an undue burden." (Reply Br. of Appellant at 10-11.) We
note, however, that Consolidated does not contend that the Court of International Trade
rejected a discovery request from Consolidated to provide these liquidation instructions
in redacted form. We have reviewed the record established before the Court of
International Trade in this case and have found no proper attempt by Consolidated to
pursue additional discovery to gain access to proprietary materials that may have been
submitted to Commerce in confidence.
The record discloses that when the Remand Determination was before the Court
of International Trade, Commerce averred that “there is some difficulty in demonstrating
the consistent language in liquidation instructions regarding the treatment of reviewed
and unreviewed companies across different administrative reviews given the proprietary
nature of some information in the instructions (i.e., identities of importers/customers)
that would have provided more meaning to their use as examples.” Rebuttal
04-1556 11
Comments, July 19, 2004. Commerce did not aver that it had in fact relied on
instructions in files covered by such proprietary restrictions. Neither the Court of
International Trade nor this court relies on any information from such files in affirming
the Remand Determination. And, as noted above, the record does not disclose any
attempt by Consolidated to force release of the proprietary information to which
Commerce alluded but on which it did not rely.
Consolidated’s complaint that Commerce did not take affirmative steps to liberate
certain files from proprietary restrictions, presumably by appropriate redaction of
confidential material, has no merit in this case, since the information that was deemed
proprietary was not specifically requested and was not used by the agency or the courts
in reaching a decision adverse to Consolidated.
Although Commerce may not disclose information designated as proprietary by
the person submitting the information without consent of the submitting person, see
19 U.S.C. § 1677f(b)(1)(A) (2000), for Commerce to defend the reasonableness of its
position based on proprietary information while refusing to release the information from
confidentiality restriction would raise serious questions, as would Commerce's refusal to
release information that would contradict the agency's position. Whether Commerce in
such a case could by redaction or otherwise satisfy the test of section 1677f(b)(1)(A)
would be a matter for the court to decide.
IV
In conclusion, upon reviewing anew the totality of the evidence before the Court
of International Trade, and the full record on appeal, we conclude that Consolidated
failed to meet its burden of showing that the August 1998 instructions were arbitrary and
04-1556 12
capricious, i.e., that Commerce consistently followed a practice in similar circumstances
contrary to that outlined in the August 1998 instructions and provided no reasonable
explanation for the change in practice. Indeed, substantial evidence supports
Commerce's determination that it has consistently liquidated unreviewed entries from
unrelated resellers at the cash deposit rate.
In reaching this conclusion, however, we reject the Court of International Trade's
determination that Commerce in the past has deviated from its consistent practice only
when (1) the importer did not participate in the administrative review; and (2) no rate
other than the manufacturer’s review rate was assessed by Commerce in the review
proceedings. Neither Consolidated nor Commerce advocates use of the factors to
explain past deviations from Commerce's consistent practice, and we find no support for
their use for that purpose in the record.
The decision of the Court of International Trade to affirm Commerce's Remand
Redetermination is hereby affirmed.
COSTS
Each party shall bear its own costs.
AFFIRMED
04-1556 13