Nsk Ltd. v. United States

Slip Op. 04-120

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
NSK LTD., NSK EUROPE LTD., :
NSK BEARINGS EUROPE LTD., :
NSK CORPORATION and NSK :
PRECISION AMERICA, INC., :
:
Plaintiffs, :
:
v. :
: Court No. 04-00413
UNITED STATES, :
:
Defendant, :
:
and :
:
TIMKEN U.S. CORPORATION, :
:
Defendant-Intervenor. :
________________________________________:

Pursuant to USCIT R. 65(a) and (b), NSK Ltd., NSK Europe Ltd.,
NSK Bearings Europe Ltd., NSK Corporation and NSK Precision
America, Inc. (collectively, “NSK”) request a preliminary
injunction and temporary restraining order, respectively. NSK
seeks to temporarily restrain and then enjoin the fifteenth
administrative reviews of the antidumping duty order on ball
bearings and parts thereof from Japan and the United Kingdom
covering the period of May 1, 2003, through April 30, 2004.
Defendants move for a dismissal pursuant to USCIT R. 12(b)(1) and
28 U.S.C. § 1581 (2000) for lack of subject matter jurisdiction.
On September 15, 2004, the Court heard oral argument to determine
whether a temporary restraining order and preliminary injunctive
relief are appropriate.

Held: NSK’s motion for a temporary restraining order and
preliminary injunctive relief is denied because NSK has not
sufficiently demonstrated that the elements required for such
relief have been met. Defendant’s motion for dismissal for lack of
subject matter jurisdiction is granted.

Dated: September 20, 2004
Court No. 04-00413 Page 2

Crowell & Moring LLP (Robert A. Lipstein, Matthew P. Jaffe,
Alexander H. Schaefer) for NSK Ltd., NSK Europe Ltd., NSK Bearings
Europe Ltd., NSK Corporation and NSK Precision America, Inc.,
plaintiffs.

Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director; Jeanne E. Davidson, Deputy Director; Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Michael D. Panzera); of counsel: Peter Kirchgraber,
Elizabeth Cooper Doyle, Philip Curtin, Arthur Sidney, Office of the
Chief Counsel for Import Administration, United States Department
of Commerce, for the United States, defendant.

Stewart and Stewart (Terence P. Stewart, Geert De Prest, Eric
P. Salonen) for Timken U.S. Corporation, defendant-internevor.

OPINION

TSOUCALAS, Senior Judge: Pursuant to USCIT R. 65(a) and (b),

NSK Ltd., NSK Europe Ltd., NSK Bearings Europe Ltd., NSK

Corporation and NSK Precision America, Inc. (collectively, “NSK”)

request a preliminary injunction and temporary restraining order,

respectively. NSK seeks to temporarily restrain and then enjoin

the fifteenth administrative reviews of the antidumping duty order

on ball bearings and parts thereof from Japan and the United

Kingdom covering the period of May 1, 2003, through April 30, 2004.

Defendants move for a dismissal pursuant to USCIT R. 12(b)(1) and

28 U.S.C. § 1581 (2000) for lack of subject matter jurisdiction.

On September 15, 2004, the Court heard oral argument to determine

whether a temporary restraining order and preliminary injunctive

relief are appropriate.
Court No. 04-00413 Page 3

Background

On May 15, 1989, Commerce published antidumping duty orders

covering anti-friction bearings (other than tapered roller

bearings) and parts thereof (“AFBs”) from various countries,

including Japan and the United Kingdom. Antidumping Duty Orders:

Ball Bearings, Cylindrical Roller Bearings, and Spherical Plain

Bearings, and Parts Thereof From Japan, 54 Fed. Reg. 20,904 (May

15, 1989). NSK’s complaint concerns the fifteenth administrative

reviews of those orders which began on June 30, 2004, and cover the

period of May 1, 2003 through April 30, 2004. See Compl. ¶ 15.

During the first administrative reviews of AFBs, Commerce

implemented a bearing-family averaging methodology (the “Family

Approach”) for model matching. See Final Results of Antidumping

Duty Administrative Reviews for Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts Thereof From France; et. al., 57

Fed. Reg. 28,360, 28,364-65 (June 24, 1992). Under this approach,

similar merchandise is matched based on eight criteria including

model design, physical dimension and precision rating. See Mem.

Supp. Mot. T.R.O. Prelim. Inj. (“NSK’s Mem.”) at 2.

During the second and third administrative reviews, The

Torrington Company challenged this model matching approach. See

id. at 2. The Court, however, upheld Commerce’s use of the Family

Approach. See Torrington Co. v. United States, 19 CIT 403, 412-14,
Court No. 04-00413 Page 4

881 F. Supp. 622, 633-35 (1995). During the fourteenth

administrative reviews for AFBs, Commerce was asked by the Timken

U.S. Corporation (“Timken”) to change its Family Approach in favor

of a new model matching methodology. See App. Mem. Supp. Mot.

T.R.O. Prelim. Inj. (“NSK’s App.”) Ex. 18. Commerce, however,

declined to change its model matching methodology for the

fourteenth review stating that it did not have conclusive evidence

that changes to its model matching methodology would yield more

accurate results. See id., Ex. 20 at 3. Commerce remarked that

the “suggested changes, or a variant thereof, [to its methodology]

might yield more accurate results,” but recommended that it first

analyze the issue further. Id.

On December 3, 2003, Commerce determined that a change to its

model match methodology for AFBs was warranted. See id., Ex. 21 at

2-5. Commerce notes that the Family Approach considers all models

within a family to be equally similar. See id. at 3. This

methodology deviates from its normal practice of searching the home

market sales of subject merchandise for the single most similar

model that can be compared. See id. at 3-4. Commerce determined

that technological changes since the implementation of the Family

Approach have lifted the time and cost restraints on the number of

matches Commerce can make on an individual basis. See id. Based

on these reasons, Commerce determined that it would “re-examine the
Court No. 04-00413 Page 5

model-matching methodology [it] use[s] in administrative reviews of

these antidumping duty orders with a view to revising the

methodology in a manner commensurate with the current level of

technology.” Id. at 4. Commerce determined that it lacked

sufficient time to implement any changes and, therefore, used the

Family Approach for the fourteenth review of AFBs. See id. at 5.

Commerce stated that it would solicit comments and rebuttal

comments “on all the physical characteristics and their importance

in order to develop an accurate and precise model-match methodology

in which [Commerce] would select the single most similar model

based on all relevant physical characteristics.” Id. at 7. On

February 2, 2004, and February 17, 2004, NSK filed comments and

rebuttal comments, respectively, about model matching criteria with

Commerce. See NSK’s Mem. at 5.

On June 30, 2004, Commerce initiated the fifteenth

administrative reviews of the antidumping duty orders covering ball

bearings and parts thereof from Japan and the United Kingdom. See

Initiation of Antidumping and Countervailing Duty Administrative

Reviews and Request for Revocation in Part, 69 Fed. Reg. 39,409

(June 30, 2004). On July 2, 2004, Commerce issued a memorandum

discussing the rationale for its determination to reassess its

model match methodology for the fifteenth administrative reviews.

See NSK’s App. Ex. 24. Commerce stated its intention to use the
Court No. 04-00413 Page 6

revised model matching methodology, but also indicated that it may

alter the methodologies depending on comments received or data

collected during the fifteenth administrative reviews. See id. at

1. On July 7, 2004, Commerce issued questionnaires to all

respondents, including NSK. See NSK’s Mem. at 5. On August 23,

2004, NSK filed this action requesting a temporary restraining

order and a preliminary injunction suspending the fifteenth

administrative reviews during the pendency of this action.

Commerce thereafter filed a motion to dismiss for lack of subject

matter jurisdiction.

DISCUSSION

I. NSK Has Failed to Meet the Requirements for the Issuance of a
Temporary Restraining Order and Preliminary Injunction

Injunctive relief is an “extraordinary remedy,” which is to be

granted sparingly. Weinberger v. Romero-Barcelo, 456 U.S. 305

(1982). In order to obtain a preliminary injunction, NSK bears the

burden of demonstrating that (1) it has a likelihood of success on

the merits; (2) absent relief, there is a threat of immediate and

irreparable harm to NSK; (3) the balance of hardships to the

parties favors issuance of the preliminary injunction; and, (4) the

public interest would be better served by a grant of the relief

requested. See Reebok Int’l Ltd. v. J. Baker, Inc., 32 F.3d 1552,

1555 (Fed. Cir. 1994); see also Zenith Radio Corp. v. United
Court No. 04-00413 Page 7

States, 710 F.2d 806, 809 (Fed. Cir. 1983). In analyzing these

factors, the Court employs a “sliding scale,” see Chilean Nitrate

Corp. v. United States, 11 CIT 538, 539 (CIT 1987), and is not

required to assign equal weight to each factor. See FMC Corp. v.

United States, 3 F.3d 424, 427 (Fed. Cir. 1993). After considering

the requisite factors, the Court finds that NSK has failed to

demonstrate that it is entitled to the requested relief.

A. Likelihood of Success on the Merits

NSK argues that Commerce’s new model match methodology and its

retroactive application of this methodology to the fifteenth

administrative reviews of AFBs is unlawful. See NSK’s Mem. at 12-

26. Specifically, NSK complains that it detrimentally relied on

Commerce’s Family Approach and that Commerce’s explanation for

changing methodologies is not supported by substantial evidence and

in accordance with law. See id. at 12-20. The Court agrees with

NSK that Commerce may not alter its methodology which has been

relied upon by a respondent without explaining the basis for the

change and demonstrating that such change is supported by

substantial evidence and in accordance with law. See NSK’s Mem. at

12; see also Ashan Iron & Steel Co., Ltd v. United States, 2003 Ct.

Intl. Trade LEXIS 109, *19-20 (CIT July 16, 2003). An agency,

however, is provided ample latitude to adopt new rules and policies

depending on the circumstances that arise. See Rust v. Sullivan,
Court No. 04-00413 Page 8

500 U.S. 173, 186-87 (1991).

Agency statements provide guidance to regulated industries.

“‘An [agency] announcement stating a change in the method . . . is

not a general statement of policy.’” American Trucking Ass’ns,

Inc. v. ICC, 659 F.2d 452, 464 n.49 (5th Cir. 1981) (quoting Brown

Express, Inc. v. United States, 607 F.2d 695, 701 (5th Cir. 1979)

(internal quotations omitted)). While a policy denotes “the

general principles by which a government is guided” by laws, BLACK ’S

LAW DICTIONARY 1178 (7th ed. 1999) (emphasis added), methodology

refers only to the “mode of organizing, operating or performing

something, especially to achieve [the goal of a statute].” Id. at

1005 (defining mode) (emphasis added). Accord Avoyelles

Sportsmen’s League, Inc. v. Marsh, 715 F.2d 897 (5th Cir. 1983);

Interstate Natural Gas Ass’n of Am. v. Federal Energy Regulatory

Comm’n, 716 F.2d 1 (D.C. Cir. 1983); Hooker Chems. & Plastics Corp.

v. Train, 537 F.2d 620 (2d Cir. 1976). Consequently, the courts

are even less in the position to question an agency action if the

action at issue is a choice of methodology, rather than policy.

See, e.g., Maier, P.E. v. United States Envtl. Prot. Agency, 114

F.3d 1032, 1043 (10th Cir. 1997) (citing Professional Drivers

Council v. Bureau of Motor Carrier Safety, 706 F.2d 1216, 1221

(D.C. Cir. 1983)). Similarly, an agency decision to change its

methodology, that is, to take an act of statutory implementation
Court No. 04-00413 Page 9

while pursuing the same policy, should be examined under the

Chevron test and sustained if the new methodology is reasonable.

See, e.g., Koyo Seiko Co. v. United States, 24 CIT 364, 373-74, 110

F. Supp. 2d 934, 942 (2000) (stating that “‘the use of different

methods [of] calculati[on] . . . does not [mean there is a]

conflict with the statute’”) (quoting Torrington Co. v. United

States, 44 F.3d 1572, 1578 (Fed. Cir. 1995)).

In the case at bar, NSK has failed to demonstrate that it will

succeed on the merits. While Commerce has indicated its intention

to abandon the Family Approach and adopt a new model match method,

see NSK’s App. Ex. 21 at 5-7, Commerce has not made its final

determination as to what methodology it will use in the fifteenth

administrative reviews.1 In addition, Commerce has only begun

collecting data to aid in determining what methodology will be

used. Furthermore, Commerce is not precluded from considering a

change in its methodology in a continuing review. Prior to the

implementation of its decision to change a methodology, Commerce is

required to provide the parties affected by the change a final

opportunity to comment before the final determination is issued.

1
NSK argues that Commerce has made such a final
determination by not requesting Family Approach data in its
questionnaires sent to interested parties in July 2004. See NSK’s
Reply Mem. Supp. Mot. T.R.O. Prelim. Inj. at 3. The Court notes,
however, that while questionnaires may be indicative of Commerce’s
intentions, they lack the authority and decisiveness of a final
determination.
Court No. 04-00413 Page 10

See 19 U.S.C § 1677m(g) (2000). Here, Commerce has not given

interested parties an opportunity to comment on the proposed

methodology nor has Commerce issued a final determination. The

lack of a final determination and evidentiary record precludes a

determination as to whether Commerce’s new methodology, if indeed

it adopts this new methodology, is reasonable. Accordingly, the

Court finds that NSK has failed to carry its burden and demonstrate

that it is likely to succeed on the merits.

B. Immediate and Irreparable Harm

NSK asserts that it will face immediate and irreparable harm

if injunctive relief is not granted. See NSK’s Mem. at 26-31.

Specifically, NSK maintains that it will not be able to apply its

safe pricing system because “Commerce’s model match methodology

lies at the very heart of this system.” Id. at 26. Consequently,

NSK asserts that without the requested relief it will lose its

right to purge itself of antidumping duty liabilities. See id. at

26-28. NSK’s inability to apply a safe pricing system “is not a

mere economic injury, but rather the loss of its right to obtain

effective judicial review of Commerce’s wrongful act so it can rid

itself of antidumping liabilities.” Id. at 27. NSK notes that it

may withdraw from the fifteen administrative reviews of AFBs on or

before September 28, 2004. See id. at 29. NSK contends that if it

withdraws from the reviews it will lose its “right to judicial
Court No. 04-00413 Page 11

review of Commerce’s unlawful abandonment of the [F]amily

[A]pproach.” Id. at 30. NSK maintains that without the requested

relief it will incur costs related with complying with Commerce’s

new methodology. See id. at 31. NSK asserts that the costs of

“complying with Commerce’s illicit retroactive application of its

new model-match methodology to the AFB15 reviews are significant,”

id., because NSK is unable to price its AFBs “safely.” See NSK’s

App. Ex. 26 ¶¶ 21, 22, 23.

To establish irreparable harm, NSK bears an extremely heavy

burden because the harm must be the type of injury that is serious

and cannot be undone. See Shandong Huarong Gen. Group Corp. v.

United States, 24 CIT 1286, 1289-90, 122 F. Supp.2d 1367, 1369-70

(2000). NSK must show a presently existing threat and not just the

mere possibility of injury. See id. Here, NSK has failed to

sufficiently demonstrate that it will be irreparably harmed without

a preliminary injunction. NSK asserts that without injunctive

relief “it will invariably lose sales that cannot be regained;

customers that cannot be recaptured; and profits that cannot be

recovered.” See NSK’s Mem. at 27. The Court has held that “the

harm [that] is irreparable cannot be determined by surmise.” Elkem

Metals Co. v. United States, 25 CIT 186, 192, 135 F. Supp. 2d 1324,

1331 (2001). NSK’s allegations are speculative because Commerce

has not rendered a final determination as to which methodology will
Court No. 04-00413 Page 12

be used for the final results. Commerce has neither accepted or

rejected with finality the use of a new model match methodology.

Accordingly, the Court finds that NSK has failed to demonstrate

that it will be irreparably harmed if injunctive relief is denied.

Because the Court finds that NSK has failed to demonstrate

that it will succeed on the merits and that it will face immediate

irreparable harm, it is not necessary to examine the remaining two

factors in depth. See FMC Corp., 3 F.3d at 427 (stating that

“[t]he absence of an adequate showing with regard to any one factor

may be sufficient, given the weight or lack of it assigned the

other factors, to justify the denial” of a preliminary injunction).

NSK asserts that injunctive relief would serve the public interest

by ensuring the fair and accurate administration of the antidumping

duty statute and preserving NSK’s right to judicial review. See

NSK’s Mem. at 32-33. NSK also argues that the balance of hardship

warrants the granting of injunctive relief and “would best preserve

the Court’s power to decide this case and award an effective

remedy, without imposing an excessive burden on Commerce.” Id. at

34. The Court finds that neither the public interest nor the

balance of hardship weigh in favor of granting a preliminary

injunction. NSK may seek meaningful judicial review when Commerce

has issued its final determination. At this juncture in the

proceeding, Commerce has just begun to collect data and formulate
Court No. 04-00413 Page 13

its model matching methodology. The Court agrees with Timken that

“NSK’s interlocutory action to stop Commerce from doing what the

law requires it to do merely delays the final results, and delays

any potential for judicial review based on the complete record.”

Timken U.S. Corp. Mem. Opp’n NSK’s Mot. Injunctive Relief at 24.

Accordingly, the Court denies NSK’s motion for a temporary

restraining order and preliminary injunction.

II. NSK Has Failed to Demonstrate that the Court has Jurisdiction
Under 28 U.S.C. § 1581(i)

In the case at bar, the Court notes that NSK’s time to file a

response to Commerce’s motion pursuant to USCIT R. 12(b)(1) does

not expire until October 4, 2004. At oral arguments held on

September 15, 2004, however, the parties addressed whether the

Court has jurisdiction under 28 U.S.C. § 1581(i). Based on the

arguments put forth by the parties during this hearing, the Court

is unpersuaded by NSK’s argument that jurisdiction exists. In

matters involving the antidumping duty laws, the Court has

jurisdiction under 28 U.S.C. § 1581(c). Under certain

circumstances, however, 28 U.S.C. § 1581(i), the residual

jurisdiction provision, confers exclusive jurisdiction upon the

Court concerning issues relating to the antidumping duty law which

are not specifically covered by other subparagraphs of section
Court No. 04-00413 Page 14

1581.2 The residual jurisdiction provision may also be invoked

when the remedy provided by another subsection would be “manifestly

inadequate.” See Miller & Co. v. United States, 824 F.2d 961, 963

(Fed. Cir. 1987), cert. denied, 484 U.S. 1041 (1988); accord

Norcal/Crosetti Foods, Inc. v. United States, 963 F.2d 356, 359

(Fed. Cir. 1992). To invoke jurisdiction under 28 U.S.C. §

1581(i), the plaintiff bears “the burden of proving the requisite

jurisdictional facts to establish the court’s jurisdiction.” Elkem

Metals Co. v. United States, 23 CIT 170, 175, 44 F. Supp. 2d 288,

292 (1999). The Court finds that NSK has failed to demonstrate

that the residual jurisdiction provision applies in this case.

NSK argues that jurisdiction under 28 U.S.C. § 1581(c) is

“manifestly inadequate with respect to this matter.” NSK’s Mem. at

9. NSK asserts that this matter is ripe for judicial review

because it “has already tried in the context of the AFB15 reviews

to convince Commerce to keep the [F]amily [A]pproach,” and Commerce

2
The statute states in pertinent part that “[t]his
subsection shall not confer jurisdiction over an antidumping or
countervailing duty determination which is reviewable either by the
Court of International Trade under section 516A(a) of the Tariff
Act of 1930 . . . .” 28 U.S.C. § 1581(i). Section 516A(a) of the
Tariff Act of 1930 provides that within 30 days after the date of
publication in the Federal Register of the final results of an
administrative review conducted by Commerce, a party to the
proceeding “may commence an action in the United States Court of
International Trade by filing a summons, and within thirty days
thereafter a complaint . . . contesting any factual findings or
legal conclusions upon which the determination is based.” 19
U.S.C. § 1516a(a)(2)(A) (2000).
Court No. 04-00413 Page 15

has rejected NSK’s arguments. Id. at 10. NSK maintains that

without immediate judicial relief it will sustain irreparable

injuries and, therefore, relief afforded under 28 U.S.C. § 1581(c)

is manifestly inadequate. See id. at 10-11. NSK argues that

Commerce has collected comments with respect to the fifteenth

administrative reviews and the appropriate model matching

methodology. See id. at 10. NSK also contends that Commerce has

made its final determination to not use the Family Approach and any

attempt by NSK to get Commerce to change its position would be

futile. See id. Commerce, however, has not issued its final

determination. In essence, NSK requests the Court to exercise

jurisdiction to decide an issue that involves interim decision-

making by Commerce.

The Court’s jurisdiction involving such decisions by Commerce,

however, is not broad. See MacMillan Bloedel Ltd. v. United

States, 16 CIT 331, 332-33 (1992). In the instances where residual

jurisdiction has been found for interim decisions, jurisdiction was

invoked because plaintiffs would have been denied relief if

required to wait for Commerce’s final determination prior to

seeking judicial review. See id. (discussing several instances in

which the Court has found jurisdiction for interim decisions).

Here, if required to await Commerce’s final determination, NSK will

not be denied adequate relief. Furthermore, contrary to NSK’s
Court No. 04-00413 Page 16

contention, judicial relief under 28 U.S.C. 1581(c) is adequate.

The Court’s failure to grant relief at this stage in the proceeding

will not preclude NSK from attaining future judicial relief. In

certain instances the Court has found jurisdiction under 28 U.S.C.

§ 1581(i) because “Commerce has decided [an] issue with finality

and is continuing to do the very thing which causes the allegedly

irreparable injury.” Techsnabexport, Ltd. v. United States, 16 CIT

420, 425, 795 F. Supp. 428, 435 (1992). Here, Commerce has not

determined which methodology it will use for its final results.

Once Commerce issues its final determination, NSK will have a basis

for relief from Commerce’s decision and the procedural steps taken

to arrive at such a determination. As the Court has already noted,

Commerce has not definitively decided to use a different model

match methodology than the Family Approach, or if it does, what the

new methodology will entail. Rather, Commerce has determined to

reassess the methodology that it has employed during previous

administrative reviews.

Here, NSK seeks to sidestep the administrative process and

obtain judicial review prior to the issuance of a final

determination by Commerce. In the review of antidumping duties,

“to allow a party to elect to proceed under section 1581(i),

without having first availed himself of the remedy provided under

section 1581(c), would undermine the integrity of the clear path
Court No. 04-00413 Page 17

Congress intended the claimant to follow.” JMC, Ltd. v. United

States, 210 F.3d 1357, 1359 (Fed. Cir. 2000). The Court finds that

NSK has failed to demonstrate that jurisdiction under 28 U.S.C. §

1581(c) is manifestly inadequate and that the Court should invoke

residual jurisdiction under 28 U.S.C. § 1581(i) to provide judicial

relief for an interim decision-making matter. Accordingly, the

Court grants Commerce’s motion to dismiss this action for lack of

subject matter jurisdiction.

CONCLUSION

The Court finds that NSK has failed to meet its burden of

demonstrating the need for a temporary restraining order and

preliminary injunction. Of the four factors considered for the

issuing of injunctive relief, NSK has failed to demonstrate the

need for the Court to intervene in Commerce’s administrative

process. Furthermore, NSK has failed to demonstrate that

jurisdiction under 28 U.S.C. § 1581(c) is manifestly inadequate and

that the Court has jurisdiction under 28 U.S.C. § 1581(i). The

Court will enter judgment accordingly.

/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: September 20, 2004
New York, New York