Nsk Corp. v. United States

Slip Op. 08-21

UNITED STATES COURT OF INTERNATIONAL TRADE
____________________________________
:
NSK CORPORATION, et al., :
:
Plaintiffs, :
:
and :
:
FAG ITALIA SpA, et al., :
:
Plaintiff-Intervenors, :
: Before: Judith M. Barzilay, Judge
v. : Consol. Court No. 06-00334
:
UNITED STATES, :
:
Defendant, :
:
and :
:
THE TIMKEN COMPANY, :
:
Defendant-Intervenor. :
____________________________________:

OPINION

[Motion for preliminary injunction denied in part and granted in part.]

Dated: February 15, 2008

Crowell & Moring, LLP, (Matthew P. Jaffe), Robert A. Lipstein, Alexander H. Schaefer, and
Sobia Haque; Sidley Austin, LLP, Neil R. Ellis and Jill Caiazzo for Plaintiffs.

Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, (Max F. Schutzman), Adam M.
Dambrov, and William F. Marshall; Steptoe & Johnson, LLP, Herbert C. Shelley, Alice A. Kipel,
and Susan R. Gihring for Plaintiff-Intervenors.

Jeffrey S. Bucholtz, Acting Assistant Attorney General; (Claudia Burke), Commercial Litigation
Branch, Civil Division, United States Department of Justice; (Mark B. Rees), David A.J.
Goldfine, James M. Lyons, and Neal J. Reynolds, Office of the General Counsel, United States
International Trade Commission for Defendant, United States.
Consol. Court No. 06-00334 Page 2

Stewart and Stewart, (Eric P. Salonen), Geert De Prest, Elizabeth A. Argenti, and Terence P.
Stewart for Defendant-Intervenor.

BARZILAY, JUDGE: On December 10, 2007, this court granted Plaintiffs’ motion for

a preliminary injunction to suspend liquidation of their entries of ball bearings from the United

Kingdom and Japan over the objection of Defendant-Intervenor, The Timken Company. See

NSK Corp. v. United States, 31 CIT __, Slip Op. 07-176 (Dec. 10, 2007) (not reported in F.

Supp.). Now Plaintiff-Intervenors FAG Italia SpA, Schaeffler Group USA, Inc., Schaeffler KG,

The Barden Corporation (U.K.), Ltd., and The Barden Corporation (collectively, “Schaeffler”),

move this court for a preliminary injunction to: (1) enjoin U.S. Customs and Border Protection

(“Customs”) from liquidating entries of ball bearings (and parts thereof) imported from Italy,

Germany and the United Kingdom during the eighteenth period of review (“POR”) (May 1, 2006

through April 30, 2007); and (2) order the U.S. Department of Commerce (“Commerce”) to

instruct Customs to suspend liquidation of said entries pending judicial review of the underlying

litigation. See USCIT Rule 65. This motion is opposed by Defendant, the United States. The

Court has subject matter jurisdiction over this case pursuant to 28 U.S.C. § 1581(c), and may

review Schaeffler’s motion for a preliminary injunction pursuant to 19 U.S.C. § 1516a(c)(2).

Because Plaintiffs did not contest injury determinations covering merchandise from Italy and

Germany in their original claim, Schaeffler’s motion for a preliminary injunction is denied in

part and granted in part.

I. BACKGROUND

On June 1, 2005, the U.S. International Trade Commission (the “ITC”) initiated a second

five-year review, pursuant to section 751(c) of the Tariff Act of 1930, as amended, 19 U.S.C.

§ 1675(c), to determine whether revocation of the antidumping duty orders on certain ball
Consol. Court No. 06-00334 Page 3

bearings from China, France, Germany, Italy, Japan, Singapore, and the United Kingdom would

be likely to lead to continuation or recurrence of material injury. See Certain Bearings from

China, France, Germany, Italy, Japan, Singapore, and the United Kingdom, 70 Fed. Reg.

31,531 (ITC June 1, 2005); see also Antidumping Duty Orders: Ball Bearings, Cylindrical Roller

Bearings, and Spherical Plain Bearings and Parts Thereof From the Federal Republic of

Germany, France, Italy, Japan, Romania, Singapore, Sweden, Thailand, and the United

Kingdom, 54 Fed. Reg. 20,900-911 (Dep’t Commerce May 15, 1989) (“AD Orders”);

Continuation of Antidumping Duty Orders: Certain Bearings From France, Germany, Italy,

Japan, Singapore, the United Kingdom, and the People's Republic of China, 65 Fed. Reg. 42,665

(Dep’t Commerce July 11, 2000). Approximately one year later, the ITC issued its final decision

and concluded that revocation of the antidumping duty orders on ball bearings from, inter alia,

Italy, Japan, Germany, and the United Kingdom, would be likely to lead to the continuation or

recurrence of material injury to an industry in the United States within a reasonably foreseeable

time. See Certain Bearings from China, France, Germany, Italy, Japan, Singapore, and the

United Kingdom; Investigation Nos. 731-TA-344, 391-A and C, 393-A, 396 and 399-A (Second

Review), 71 Fed. Reg. 51,850 (ITC Aug. 31, 2006) (“Final Results”). After Plaintiffs

commenced the underlying action challenging the Final Results of the second sunset review,

Schaeffler intervened as a matter of right. See 28 U.S.C. § 2631(j)(1)(B); USCIT R. 24.

Since Commerce’s periodic administrative review of the subject entries was never

completed, Schaeffler’s entries for the eighteenth POR remain subject to antidumping duties and

would normally be liquidated at a “rate established in the completed review covering the most

recent prior period or, if no review has been completed, the cash deposit rate applicable at the
Consol. Court No. 06-00334 Page 4

time merchandise was entered.” 19 C.F.R. § 351.212(a) & (c); see NMB Sing. Ltd. v. United

States, 24 CIT 1239, 1240, 1241-42, 120 F. Supp. 2d 1134, 1136, 1138 (2000); see also Ball

Bearings and Parts Thereof from France, Germany, Italy, Japan, and the United Kingdom:

Notice of Partial Rescission of Antidumping Duty Administrative Reviews, 72 Fed. Reg. 64,577

(Dep’t Commerce Nov. 16, 2007). Accordingly, Schaeffler has filed this application for a

preliminary injunction to suspend liquidation of said entries during the pendency of the

underlying litigation.

II. DISCUSSION

A. Enlargement of the Action

Before undertaking the traditional four-part analysis of factors necessary to secure a

preliminary injunction, the court must first address whether it has jurisdiction to suspend

liquidation of the subject entries. Defendant argues that as a mere intervenor, Schaeffler is not

entitled to a preliminary injunction on any of its entries because it did not file a summons and

complaint within the statutorily required time period and thus, may only intervene in support of

Plaintiffs’ claim. Commerce Br. 3-4; ITC Br. 4-5. Defendant further contends that suspending

liquidation of Schaeffler’s entries would enlarge the scope of the litigation by adding new entries

to those already designated for review in the original complaints. Commerce Br. 4-5; ITC Br. 5-

7. In advancing these arguments, Defendant relies on the recent opinion Laizhou Auto Brake

Equip. Co. v. United States, 31 CIT __, 477 F. Supp. 2d 1298 (2007) (“Laizhou”). Commerce

Br. 3-4; ITC Br. 5-6. The court, however, is convinced that the analysis in Laizhou

misconstrues the cases it relies upon for support.

In Laizhou, a Chinese exporter intervened in a case to challenge the final results of an
Consol. Court No. 06-00334 Page 5

administrative review on automotive brake rotors from China, and sought a preliminary

injunction to suspend liquidation of its entries pending judicial review. The Court denied the

motion, citing Vinson v. Washington Gas Light Co., 321 U.S. 489, 498 (1944) and Torrington

Co. v. United States, 14 CIT 56, 59, 731 F.Supp. 1073, 1076 (1990) (“Torrington”) for the

proposition that granting such a motion would improperly enlarge the issues beyond the scope of

the original litigation. See Laizhou, 31 CIT at __, 477 F. Supp. 2d at 1300-01. Notably, both the

plaintiff and plaintiff-intervenor sought judicial review of an administrative determination

covering merchandise from China.1 See id. at __, 477 F. Supp. 2d at 1299. The rationale

provided in Laizhou for denying the intervenor’s preliminary injunction overlooks essential

distinctions in the cases it relies upon for support and consequently applies the principle of

enlargement too broadly.

As in Laizhou, Defendant cites Vinson only for the basic principle that “an intervenor is

admitted to the proceeding as it stands, and in respect of the pending issues, but is not permitted

to enlarge those issues or compel an alteration of the nature of the proceeding.” Vinson, 321

U.S. at 498. Vinson, a Supreme Court case from 1944, is factually distinguishable and therefore

of minimal value in determining whether a plaintiff-intervenor in an ITC injury determination is

entitled to a preliminary injunction. The petitioner-intervenor in that case sought review of a

rate order issued by the Public Utilities Commission of the District of Columbia during World

War II. As the Supreme Court characterized the case in its opinion:

1
Unlike the intervenor in Laizhou, however, Schaeffler is challenging determinations that
cover both the same and different countries than those designated in Plaintiffs’ complaints. In
other words, Schaeffler is seeking the same judicial remedy for its entries from Italy, Germany,
and the United Kingdom as is requested by Plaintiffs for entries from Japan and the United
Kingdom.
Consol. Court No. 06-00334 Page 6

Thus it appears that the controversy is essentially one between two governmental
agencies as to whether the powers of the one or the other are preponderant in the
circumstances.

In view of the petitioners’ insistence that they were entitled, in effect, to
control and direct the inquiry without regard to the statutory powers of the
Commission, we shall first examine the extent of the authority conferred upon
petitioners by Congress.

Vinson, 321 U.S. at 497. The Supreme Court then went on to analyze the Emergency Price

Control Act of 1942 to determine whether it conferred a right of intervention. The Court did not

find that the Act clearly conferred such a right. It then went on to conclude:

If the petitioners were admitted as intervenors by a state commission, or
by the District Commission, which is a respondent here, they might, of course, be
admitted to participation in the proceeding upon reasonable terms; and one of the
most usual procedural rules is that an intervenor is admitted to the proceeding as
it stands, and in respect of the pending issues, but is not permitted to enlarge
those issues or compel an alteration of the nature of the proceeding. To this
effect was the Commission’s rule on the subject. It would seem then that, in the
absence of clear legislative mandate to the contrary, the petitioners should not
possess greater rights than other intervenors.

Id. at 498 (emphasis added). It is this language that Defendant argues supports its position in

this litigation. Commerce Br. 4; ITC Br. 4-5. The court disagrees. Because the facts of Vinson

are completely disparate from those presented here, the case has no application other than

providing a mere recitation of the general rule mentioned above.

Similarly, the Torrington case is also distinguishable. In Torrington, a domestic

producer of bearings challenged certain aspects of a final antidumping determination. See

Torrington, 14 CIT at 56, 731 F. Supp. at 1074. One of the respondents then moved to intervene

and simultaneously filed an answer to the complaint which interposed two affirmative defenses

contesting the domestic producer’s standing to litigate certain issues. See id. In response, the

domestic producer moved to strike these affirmative defenses on the grounds that the issue of
Consol. Court No. 06-00334 Page 7

standing was not in contention between the original parties. See id. at 57, 731 F. Supp. at 1074.

This Court held that the issue was indeed beyond the scope of the original litigation and could

not be asserted by respondent in its position as intervenor. See id. at 57, 731 F. Supp. at 1075.

Thus, the respondent impermissibly enlarged the substantive issues by asserting an affirmative

defense that had not been raised between the original parties. See Silver Reed Am., Inc. v. United

States, 8 CIT 342, 348, 600 F. Supp. 846, 850-51 (1984); cf. Fuji Elect. Co., Ltd. v. United

States, 7 CIT 247, 248-49, 595 F. Supp. 1152, 1153-54 (1984).

In contrast, Schaeffler is not injecting new legal issues into the original litigation. See

Silver Reed Am., Inc., 8 CIT at 348, 600 F. Supp. at 850-51. The proposed legal theories and

arguments currently before the court remain unchanged. In Plaintiffs’ complaints, they assert the

following arguments:

1. The [ITC’s] decision to cumulate imports of ball bearings from the
United Kingdom with imports of ball bearings from France, Germany, Italy, and
Japan is unsupported by substantial evidence on the record or otherwise not in
accordance with law.

2. The [ITC’s] interpretation of current conditions of competition,
specifically those involving the issue of substitutability, and its determination that
such conditions are likely to prevail for the reasonable foreseeable future are
unsupported by substantial evidence on the record or otherwise not in accordance
with law.

3. The [ITC’s] determination that the volume of subject imports in the
reasonably forseeable future would likely be significant if the orders were
revoked is unsupported by substantial evidence on the record or otherwise not in
accordance with law.

4. The [ITC’s] determination with regards to likely price effects if the
orders were revoked is unsupported by substantial evidence on the record or
otherwise not in accordance with law.

5. The [ITC’s] determinations that the domestic ball bearings industry is
currently vulnerable to material injury and that revocation of the antidumping
Consol. Court No. 06-00334 Page 8

duty orders would likely have a significant adverse effect on the domestic
industry, and its basis for those determinations, are unsupported by substantial
evidence on the record or otherwise not in accordance with law.

NSK Corp. & NSK Europe, Ltd. Compl. ¶ 12; NSK Corp. & NSK Ltd. Compl. ¶¶ 11, 15, 19, 23.

Schaeffler reiterates these exact arguments in its motion. Pl.-Int. Mot. TRO & Prelim. Inj. 6.

Therefore, the court views the principle of enlargement as better reserved for situations in which

an intervenor adds new legal issues to those already before the court. Moreover, the fact that an

intervenor brings additional entries to the litigation carries no weight with regard to enlargement.

See Silver Reed Am., Inc., 8 CIT at 349, 600 F. Supp. at 852; see also Laclede Steel Co. v. United

States, No. 96-1029, 1996 WL 384010, at *3 (Fed. Cir. July 8, 1996) (“Laclede”) (unpublished

disposition). It is well settled that an intervenor may obtain a preliminary injunction to suspend

liquidation of its own entries during the pendency of the litigation. See, e.g., Ceramica

Regiomontana, S.A. v. United States, 7 CIT 390, 396, 590 F. Supp. 1260, 1265 (1984)

(“Ceramica”); see also USCIT R. 56.2.2

B. Judicial Review of Injury Determinations

Compared to the entry specific regime associated with customs jurisprudence, see, e.g.,

Daimlerchrysler Corp. v. United States, 28 CIT 2105, 2106-07, 350 F. Supp. 2d 1339, 1341-42

(2004), the Court reviews the final results of an administrative ruling under § 1675 on the basis

of specific determinations as set forth in plaintiff’s summons and complaint. To establish the

Court’s jurisdiction over merchandise covered by a particular determination, a claimant must

specify in its pleadings the individual determination that covers those entries. In most cases,

2
In both Laclede and Ceramica, the intervenor’s entries were subject to the same
determination challenged by the plaintiffs. See Ceramica, 7 CIT at 392, 590 F. Supp. at 1262;
Laclede, 1996 WL 384010, at *1.
Consol. Court No. 06-00334 Page 9

there is only one determination under review and the country to which it applies is obvious.

However, the sunset review challenged here is a collection of individual determinations for

different countries published as a single administrative ruling. See §§ 1675(a), (c) &

1675a(a)(7); see also Final Results, 71 Fed. Reg. at 51,850. In such cases, the plaintiff’s

summons and complaint must guide the court as to which determinations, and therefore the

entries covered by them, are subject to its final judgment.

As the government explains,

the [ITC] specifically assigned separate investigation numbers to each of the
countries and products that were subject to the [its] reviews. . . . And, on the first
page of its report, the [ITC] referred to its sunset decisions for the various
bearings products from China, France, Germany, Italy, Japan, Singapore, and the
United Kingdom as a set of “determinations,” identifying each of those
determinations by the individual investigation numbers for the products and
countries involved. . . . Further, throughout the report, the [ITC] consistently used
the singular word, “determination,” when referring to its prior injury and sunset
determination for any individual country, but used the plural of the word,
“determination,” when referring to multiple determinations for any grouping of
countries. . . . [I]t issued individual determinations for all of the countries
involved in the reviews, whether or not they were cumulated with other countries.

Def. Surreply 3-4; see Final Results, 71 Fed. Reg. at 51,850. Section 1675(c) instructs the

government to initiate a five-year review to determine “whether revocation of the countervailing

or antidumping duty order . . . would be likely to lead to continuation or recurrence of

dumping. . . .” § 1675(c)(1) (emphasis added). The plain language of the statute and reference

to “order” in the singular clearly suggests that sunset review determinations apply to individual

antidumping orders. See § 1675(c). Furthermore, the fact that the ITC undertakes a review and

cumulates merchandise from several countries to evaluate its aggregated effect on the domestic

industry does not change a collection of individual injury determinations into a single

determination for purposes of judicial review. See Top-of-the-Stove Stainless Steel Cooking
Consol. Court No. 06-00334 Page 10

Ware from Korea, USITC Pub. 3485, Inv. Nos. 701-TA-267 & 731-TA-304 (Review) (Remand),

at 2 n.8 (Feb. 2002) (limiting scope of remand determination based on which orders were

appealed); see also Gerald Metals, Inc. v. United States, 132 F.3d 716, 717 (Fed. Cir. 1997).

Under § 1675a(a)(7), “the [ITC] may cumulatively assess the volume and effect of imports of the

subject merchandise from all countries” under review. § 1675a(a)(7) (emphasis added). The

purpose of cumulation is to “eliminate inconsistencies in [ITC] practice and to ensure that the

injury test adequately addresses simultaneous unfair imports from different countries.” Trade

and Tariff Act of 1984, H.R. Rep. 98-725, at 37, reprinted in 1984 U.S.C.C.A.N. 5127, 5164

(emphasis added). Again, nothing in the statute or legislative history detracts from the basic

proposition that this Court reviews injury determinations on an individual basis.

In 1989, Commerce issued several antidumping orders on ball bearings from, inter alia,

Italy, Germany, Japan, and the United Kingdom. See AD Orders, 54 Fed. Reg. 20,900-911.

Plaintiffs have challenged the Final Results of the second sunset review, which concluded that

removal of said antidumping orders would likely lead to material injury to the domestic industry.

See Final Results, 71 Fed. Reg. at 51,850. Although the ITC decided to cumulate merchandise

from several countries in its review under § 1675a(a)(7), Plaintiffs appealed only the

determinations covering merchandise from Japan and the United Kingdom.3 NSK Corp. & NSK

Ltd. Compl. ¶¶ 1-5; NSK Corp. & NSK Ltd. Summons ¶¶ 1-2; NSK Corp. & NSK Europe, Ltd.

Compl. ¶¶ 1-5; NSK Corp. & NSK Europe, Ltd. Summons ¶¶ 1-2. As an intervenor, Schaeffler

wishes to dispute the continued imposition of antidumping duties on its imports from Italy,

3
Plaintiffs also filed separate actions challenging each determination. NSK Corp. and
NSK Ltd. filed a summons and complaint for the determination covering ball bearings from
Japan, whereas NSK Corp. and NSK Europe Ltd. filed separate pleadings for the determination
covering ball bearings from the United Kingdom.
Consol. Court No. 06-00334 Page 11

Germany, and the United Kingdom. Unfortunately, the only determinations currently before the

court are those from Japan and the United Kingdom. As a result, the court lacks authority to

suspend liquidation of entries from Italy and Germany. In this instance, Schaeffler should have

filed a separate summons and complaint contesting the determinations as to Italy and Germany

to properly bring these entries under the court’s jurisdiction. See Ceramica, 7 CIT at 395-96,

590 F. Supp. at 1264. Therefore, Schaeffler’s motion for a preliminary injunction is denied with

respect to entries from Italy and Germany.

C. Entries from the United Kingdom

As previously mentioned, Plaintiffs appealed the ITC’s determinations upholding the AD

Orders covering entries from Japan and the United Kingdom. Schaeffler intervened as a matter

of right and has requested that the court suspend liquidation of its entries from the United

Kingdom. See 28 U.S.C. § 2631(j)(1)(B); USCIT R. 24 & 56.2. Pursuant to Plaintiffs’

summons and complaints, entries from the United Kingdom are properly before the court.

Consequently, Schaeffler may suspend liquidation on entries from the United Kingdom upon

satisfying the traditional four factor test. To obtain a preliminary injunction, the movant must

demonstrate: (1) that it is likely to succeed on the merits at trial; (2) that it will suffer irreparable

harm if preliminary relief is not granted; (3) that the balance of the hardships tips in the movant’s

favor; and (4) that a preliminary injunction will not be contrary to the public interest. See FMC

Corp. v. United States, 3 F.3d 424, 427 (Fed. Cir. 1993).

Other than having entries from separate determinations, Plaintiffs and Schaeffler are

similarly situated with regard to the four factors. Neither the ITC nor Commerce addressed the

four factors in their briefs, confining their arguments to the issues discussed herein. Because the
Consol. Court No. 06-00334 Page 12

legal issues are identical to those already established between the original parties, the court need

not duplicate its analysis set forth in NSK Corp., 31 CIT at __, Slip Op. 07-176. The court holds

that Schaeffler has made the necessary showing to obtain a preliminary injunction for its entries

from the United Kingdom.

III. CONCLUSION

For the foregoing reasons, Schaeffler’s motion for a preliminary injunction is DENIED

with regard to entries from Italy and Germany; and GRANTED with regard to entries from the

United Kingdom.

Dated: February 15, 2008 /s/ Judith M. Barzilay
New York, NY Judge Judith M. Barzilay