Slip Op. 04-96
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
NMB SINGAPORE LTD. and :
PELMEC INDUSTRIES (PTE) LTD.; :
NSK-RHP EUROPE LTD., RHP BEARINGS LTD. :
and NSK BEARINGS EUROPE LTD.; :
SKF USA INC., SKF INDUSTRIE S.p.A., :
SKF FRANCE S.A., SARMA and SKF GmbH; :
NTN BEARING CORPORATION OF AMERICA, :
AMERICAN NTN BEARING MANUFACTURING :
CORPORATION, NTN BOWER CORPORATION, :
NTN DRIVESHAFT INCORPORATED, :
NTN-BCA CORPORATION and :
NTN CORPORATION, :
:
Plaintiffs, :
:
and :
:
THE BARDEN CORPORATION (U.K.) LIMITED : Consol. Court No.
and THE BARDEN CORPORATION; : 00-07-00373
FAG ITALIA S.p.A., :
FAG KUGELFISCHER GEORG SCHAFER AG and :
FAG BEARINGS CORPORATION, :
:
Plaintiff-Intervenors, :
:
v. :
:
UNITED STATES, :
:
Defendant, :
:
and :
:
TIMKEN U.S. CORPORATION, :
:
Defendant-Intervenor. :
________________________________________:
[The Commission’s Remand Determination is affirmed. Case
dismissed.]
White & Case LLP (Walter J. Spak, Christopher F. Corr, Lyle B.
Vander Schaaf and Jonathan Seiger) for NMB Singapore Ltd. and
Consol. Court No. 00-07-00373 Page 2
Pelmec Industries (PTE) Ltd., plaintiffs.
Crowell & Moring LLP (Matthew P. Jaffe and Robert A. Lipstein)
for NSK-RHP Europe Ltd., RHP Bearings Ltd. and NSK Bearings Europe
Ltd., plaintiffs.
Steptoe & Johnson LLP (Herbert C. Shelley) for SKF USA Inc.,
SKF Industrie S.p.A., SKF France S.A., Sarma and SKF GmbH,
plaintiffs.
Barnes, Richardson & Colburn (Donald J. Unger, Kazumune V.
Kano, David G. Forgue and Shannon N. Rickard) for NTN Bearing
Corporation of America, American NTN Bearing Manufacturing
Corporation, NTN Bower Corporation, NTN Driveshaft Incorporated,
NTN-BCA Corporation and NTN Corporation, plaintiffs.
Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Max
F. Schutzman) for The Barden Corporation (U.K.) Limited, The Barden
Corporation, FAG Italia S.p.A., FAG Kugelfischer Georg Schafer AG
and FAG Bearings Corporation, plaintiff-intervenors.
Lyn M. Schlitt, General Counsel; James M. Lyons, Acting
General Counsel, Office of the General Counsel, United States
International Trade Commission (Mary Elizabeth Jones), for the
United States, defendant.
Stewart and Stewart (Terence P. Stewart and Geert De Prest)
for Timken U.S. Corporation, defendant-intervenor.
Dated: August 5, 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.”
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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
On September 3, 2003, this Court issued an order directing the
United States International Trade Commission (“ITC” or
“Commission”), to: (1) “reconcile the error alleged by NMB with
respect to NMB’s sister company, if the Commission utilizes NMB’s
sister company in the Commission’s cumulation determination”; (2)
“explain how commodity-like the Commission deems [certain]
antifriction bearings”; and (3) apply this Court’s finding
regarding the meaning of the term “likely” to the ITC’s cumulation
analysis and its determination regarding the effect of revoking the
antidumping duty orders at issue. NMB Singapore Ltd. & Pelmec
Indus. (PTE) Ltd. v. United States (“NMB Remand”), 27 CIT ___, ___,
288 F. Supp. 2d 1306, 1352 (2003). The Commission submitted its
views pursuant to NMB Remand on December 2, 2003, see Views of the
Commission (“Remand Determination”), which involve the five-year
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sunset review final determination entitled Certain Bearings From
China, France, Germany, Hungary, Italy, Japan, Romania, Singapore,
Sweden, and the United Kingdom (“Final Determination”), 65 Fed.
Reg. 39,925 (June 28, 2000). The Commission found in the Remand
Determination as it did in the Final Determination that, on a
whole, “revocation of the antidumping duty orders on ball bearings
from France, Germany, Italy, Japan, Singapore, 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.” Remand Determination at 3. The
Commission specified that the proper definition of the term
“likely” was applied throughout its sunset review determination,
and asserted that it was proper to cumulate the subject imports
because: (1) “subject imports from all six countries would be
likely to have a discernible adverse impact on the domestic
industry if the [antidumping duty orders at issue] were revoked”;
(2) “a reasonable overlap of competition between the subject
imports and the domestic like product is likely to exist if the
orders were revoked” and (3) no significant differences exist
between the conditions of competition among the subject countries.
Id. at 5-6. Moreover, the Commission reasserted its position that
NMB’s sister company should not be excluded from the domestic
industry since the appropriate circumstances to warrant such
exclusion do not exist. See id. at 7-8.
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On January 16, 2004, plaintiffs, NMB Singapore Ltd. and Pelmec
Industries (PTE) Ltd. (collectively “NMB”) and NSK-RHP Europe Ltd.,
RHP Bearings Ltd. and NSK Bearings Europe Ltd. (collectively “NSK-
RHP”) filed comments to the Remand Determination with this Court.
Comments were also submitted by defendant-intervenor, Timken U.S.
Corporation (“Timken”) on January 16, 2004. Rebuttal comments were
submitted by NMB on February 2, 2004, and by NSK and Timken on
February 9, 2004. The Commission also filed reply comments on the
Remand Determination on February 9, 2004.
III. Discussion
A. Contentions of the Parties
1. NSK-RHP’s Contentions
Section 1675a(a)(7) of Title 19 of the United States Code
states that for five-year reviews, the Commission “shall not
cumulatively assess the volume and effects of imports of the
subject merchandise in a case in which it determines that such
imports are likely to have no discernable adverse impact on the
domestic industry.” According to NSK-RHP, the record demonstrates
that subject imports from the United Kingdom are likely to have “no
discernable adverse impact on the domestic industry” and,
therefore, the Commission erred in cumulating subject imports.
Comments on the Commission’s Remand Determination (“NSK-RHP
Comments”) at 3 (emphasis omitted). NSK-RHP contends that the
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Commission improperly based its conclusion that cumulation was
necessary on the following factors: (1) the subject industries in
France, Germany, Italy, Japan, Singapore and the United Kingdom
were export-oriented; (2) “the industry in each country had
available, unused production capacity; and [(3)] four of the six
countries were among the top five nations in the world for total
bearing production.” Id. at 3-4.
NSK-RHP specifically argues that “the framework” for applying
the mandatory part of 19 U.S.C. § 1675a(a)(7), that is not
cumulating subject imports upon a finding of no discernable impact,
“was set by the Commission when it declined to cumulate [ball
bearing] imports from Romania and Sweden. Like the [subject
industry in the United Kingdom,] the Commission found that both the
Romanian and Swedish [ball bearing] industries were export-
oriented.” Id. at 5. The Commission based its no discernable
impact finding for Romania and Sweden on three factors. First,
exports to the domestic market accounted for a small percentage of
all Romanian and Swedish shipments. See id. Second, Romania and
Sweden’s capacity utilization rate is very low, “which apparently
offset[s] concerns about available capacity.” Id. Third, neither
Romania nor Sweden are among the top five bearing producing
nations. See id. NSK-RHP argues, therefore, that if the United
Kingdom exhibits these same three “counterbalancing” factors, the
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Commission should find it probable that the United Kingdom’s
subject imports would also have no discernable adverse impact on
the domestic industry. See id. at 6.
NSK-RHP compares subject imports from the three countries and
argues that the United Kingdom’s bearing industry is less export-
oriented than “the Swedish industry and sits in a position
comparable to that of the Romanian [ball bearing] industry.” Id.
NSK-RHP notes that, with exception to 1997, exports from the United
Kingdom to the United States accounted for a small percentage of
total shipments. See id. at 7 (business proprietary version).
Further, NSK-RHP points out that the United Kingdom, Sweden and
Romania have comparable capacity utilization rates and that the
size of the United Kingdom’s ball bearing industry is relatively
small when compared to the other countries involved in the original
review. See id. at 8-9. NSK-RHP maintains that record evidence
“which the Commission failed to consider, demonstrates that subject
imports from the United Kingdom are likely to have no discernable
adverse impact on the domestic industry.” Id. at 9. Consequently,
NSK-RHP requests that the Court re-remand the Final Determination
with instructions to the Commission to explain how the record
evidence was weighed relative to the “likely” standard regarding
the agency’s decision to cumulate imports from the United Kingdom.
See id. at 11.
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Finally, NSK-RHP argues that the Commission erred in not re-
opening the record on remand to collect additional evidence
regarding whether revocation of the subject orders would likely
lead to continuation or recurrence of material injury. See id. at
12. According to NSK-RHP, “like the section involving cumulation,
[the continuation or recurrence of material injury section of the
Remand Determination] contains no analysis that logically bridges
the ‘likely’ standard that the Commission says it applied to the
Commission’s subsequent conclusion.” Id.
2. NMB’s Contentions
NMB argues that the Commission did not properly explain its
findings regarding cumulation of imports from Singapore using the
appropriate likely standard. See Comments of NMB on Views of the
Commission on Remand (“NMB’s Comments”) at 6. Specifically, NMB
contends that the Commission did not cite any additional evidence
to support its finding in light of the Court’s interpretation of
the term “likely.” See id. According to NMB, the evidence cited
by the Commission was not sufficient to support a finding that
imports from Singapore would probably compete with domestic like
products if the subject order were revoked. See id. Moreover, the
Commission ignored certain relevant evidence on channels of
distribution, price competition and purchaser perceptions that
could have influenced a finding of lack of interchangeability. See
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id. at 16-17.
NMB specifically attacks Vice Chairman Hillman’s revised
conclusion upon remand that competition among domestic and
Singapore bearings would be likely. NMB claims that Vice Chairman
Hillman does not base her new determination on “the substantial
evidence necessary to satisfy the Court’s [likely] requirement.”
Id. at 18. NMB further argues that the Commission’s conclusion
that ball bearings are more commodity-like than other antifriction
bearings is unsupported by substantial evidence, and urges the
Court to reverse the Commission’s determination. See id. at 30-31,
37.
3. Timken’s Contentions
Timken argues that the Court should uphold the Commission’s
Remand Determination since it complied with the Court’s
instructions in NMB Remand. The Remand Determination is supported
by substantial evidence, which consists of “statements by various
parties (including parties opposing the orders) during the review,
studies, prior Commission determinations, and information collected
from purchasers and importers during the sunset reviews.” Remand
Comments of Timken at 4.
With respect to the arguments raised by NMB, Timken maintains
that a colloquy between Commissioner Bragg and Mr. Malstrom,
president and CEO of SKF USA, Inc., reveals that ball bearings are
Consol. Court No. 00-07-00373 Page 10
the most commodity-like of bearing types. See id. at 7-8. Mr.
Malstrom’s assessment also agrees with evidence the Commission
collected in its prior injury investigations. See id. at 6-10.
The Commission did not rely on erroneous information to determine
that there existed a reasonable overlap of competition between
imports from Singapore and other subject countries. See id. at 7.
Instead the Commissioners relied, inter alia, on[: (1)]
their previous finding of reasonable overlap of
competition (in the original investigation)[; (2)] the
commodity-like nature of the subject imports[; (3)] the
reports of purchasers that Singapore imports were
interchangeable with the domestic product[; (4)] the
presence of the imports in the same distribution
channels[; and (5)] the presence of the imports
throughout the United States.”
Id. Nevertheless, the Commission reopened the investigation upon
remand and Timken alone produced new information which, in
combination with the original evidence, overwhelmingly supports the
Commission’s determination that reasonable overlap of competition
with imports from Singapore is likely. See id. at 10.
Finally, Timken urges the Court to dismiss the remaining
arguments raised by NMB and NSK-RHP since either the pertinent
issues have already been decided or because no viable arguments
remain in light of explanations provided in the Remand
Determination and newly collected record evidence. See id. at 11-
15.
Consol. Court No. 00-07-00373 Page 11
B. Analysis
Pursuant to the applicable standard of review, this Court must
uphold an agency determination so long as it is supported by
substantial evidence. See 19 U.S.C. § 1516a(b)(1)(B)(i). This
case was remanded to the Commission with specific instruction to
apply the proper meaning of the term “likely” to the ITC’s
cumulation analysis and determination regarding the effect of
revocation. In the Remand Determination, the Commission explained
that for purposes of the agency’s findings, the term “likely” means
probable. See Remand Determination at 5. The Commission also
reasserted its original findings regarding cumulation and adverse
impact and further clarified that “[n]o Commissioner relied on . .
. erroneous information [regarding NMB’s sister company] in finding
that a reasonable overlap of competition would be likely upon
revocation.” Id. at 6. Moreover, the Commission reconsidered and
adopted its original findings regarding the conditions of
competition and explained why ball bearings are more commodity-like
than other types of bearings. For the reasons set forth below, the
Court affirms the Commission’s Remand Determination.
1. The Commission’s Conclusion that Ball Bearings Are
More Commodity-Like than Other Bearings is
Supported By Substantial Evidence
NMB complains that the Commission’s conclusion regarding the
commodity-like nature of ball bearings was unsupported by
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substantial evidence. The Court, however, disagrees. The
conclusions drawn by the Commission from the testimony between
Commissioner Bragg and Mr. Malstrom were reasonable. The testimony
reveals that deep groove ball bearings are the most commodity-like
bearing type in the industry. See Def. Commission’s Reply
Comments on the Remand Determination (“Def.’s Reply”) at 21.
Tapered roller bearings are the second most commodity-like. See
id. The Remand Determination revealed that the Commission
considered factors, including quality and delivery dependability,
which weighed against considering ball bearings commodities in its
determination. However, the Commission also found that purchasers
“perceived a significant degree of substitutability between
domestically produced ball bearings and subject imports. . . . This
substitutability indicated that multiple producers were able to
meet purchasers’ non-price concerns, such as engineering support,
leaving price as the primary remaining area for competition.”
Def.’s Reply at 22; see Remand Determination at 10-11. The
Commission properly weighed all of the evidence and the explanation
provided in the Remand Determination pertaining to how commodity-
like the agency deems ball bearings complies with the instructions
in NMB Remand.
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2. The Commission Properly Cumulated Ball Bearings
from the United Kingdom and Singapore and
Determined that Such Imports Are Likely to Lead to
the Continuation of Material Injury in Case of
Revocation
NSK-RHP and NMB argue that the Commission erred in cumulating
certain countries. The arguments advanced by both parties,
however, rely on unpersuasive evidence. NSK-RHP and NMB attempt to
draw similarities between the ball bearing industries in Romania
and Sweden and the United Kingdom and Singapore and argue that
since subject imports from the former two countries were not
cumulated, the Commission should similarly not cumulate subject
imports from the later two countries. However, both complainants
overlook two important factors; the major disparity in size between
the subject industries and the differing degrees of penetration to
the domestic market that Romania and Sweden have on the one hand,
and that the United Kingdom and Singapore sustain on the other.
NSK-RHP specifically argues that the industry in the United
Kingdom was similar to those in Romania and Sweden. However, NSK-
RHP makes no mention of the significant differences in production
capacity or volume between the United Kingdom and the other two
countries. NSK-RHP further fails to consider that “unused
production capacity in the United Kingdom in 1998 was significantly
larger than the entire production capacity in Sweden,” and that
“subject imports from the United Kingdom [and] Singapore had a
Consol. Court No. 00-07-00373 Page 14
significant advantage over imports from Romania, given that no
subject imports from Romania were pre-certified for sales to
[original equipment manufacturers.]” Def.’s Reply at 8, 9.
NMB similarly argues that subject imports from Singapore were
similar to those of Sweden and Romania since exports to the
domestic market accounted for a small percentage of all Romanian
and Swedish shipments. NMB fails to disclose, however, the major
difference in the volume of imports between these three countries.
Simply put, “[s]ubject imports from Singapore dwarfed those from
Romania and Sweden. . . . Similarly, the scale of the ball bearing
industry in Singapore, and its unused capacity, dwarfed those in
Romania and Sweden.” Id. at 6-7.
The Court finds that the Commission’s Remand Determination
complied with the Court’s instructions in NMB Remand with respect
to the cumulation issue. In the Remand Determination, the ITC
explains that it considered Singapore’s ability and motivation to
compete in the United States market a factor in it decision to
cumulate subject imports from Singapore. According to the ITC,
[t]he evidence on the record . . . indicated significant
differences between subject imports from Singapore and
those from Romania and Sweden. The [United States]
market was far more important to the industry in
Singapore than to the other two, and subject imports from
Singapore were in a better position to compete in the
[United States] market than were those from Romania.
Given its continued significant position in the [United
States] market and the importance of the [United States]
Consol. Court No. 00-07-00373 Page 15
market to NMB, subject imports from Singapore were likely
to have a discernable adverse impact on the [domestic]
market, while those from Romania and Sweden were not.
Def.’s Reply at 7-8. The Commission also explained that in 1998,
the ball bearing industry in the United Kingdom was significantly
larger than those in Romania or Sweden. See id. at 8. “The volume
of subject imports from the United Kingdom was also significantly
higher . . . [while t]he unused production capacity . . . was
significantly larger than the entire producti[on] capacity in
Sweden.” Id. at 8-9. Moreover, the Commission explained why
subject imports from the United Kingdom had a “significant
advantage over imports from Romania.” Id. at 9. The Commission
dispelled of NSK-RHP’s arguments regarding discernable adverse
impact. The Commission explained that it
found that ball bearings were more commodity-like than
other bearings and that a significant degree of
fungibility existed among the various ball bearings,
indicating that most producers could supply most
purchasers’ non-price requirements, leaving price as the
primary area for competition. The Commission also found
that demand for ball bearings was relatively inelastic,
and that a decline in price would have little effect on
demand.
Id. at 10.
The Commission sufficiently addressed the arguments raised by
NMB with respect to Vice Chairman Hillman’s ultimate decision to
cumulate in the Remand Determination. The Commission admitted that
the record was reopened since an error was committed in the staff
Consol. Court No. 00-07-00373 Page 16
report, and invited the parties to present new information to the
agency. Timken was the only party to present additional
information, and upon a new review of the record, the ITC
determined and the Court agrees that “a reasonable overlap of
competition is likely based on the evidence of purchasers regarding
the degree of interchangeability between subject imports and the
domestic like product and the presence of the domestic like product
and subject imports in similar channels of distribution.” Id. at
7-8. The Court also agrees with the Commission that Vice Chairman
Hillman’s decision to cumulate was based on the additional evidence
gathered during remand pertaining to fungibility. See Remand
Determination at 7 n.24. Accordingly, the Court finds that these
explanations sufficiently resolve the question of the Commission’s
interpretation of the term “likely” with respect to cumulation.
The Commission also clarified that it applied the term
“likely” with regards to its determination that revocation would
likely lead to continuation or recurrence of injury in accordance
with the Court’s instruction and consistent with a prior
determination that was affirmed by Usinor Industeel, S.A. v. United
States, Slip Op. 02-152, 26 CIT ___, ___ (Dec. 20, 2002). See
Remand Determination at 13. That is, it found that “likely” means
“probable.” See id. The Commission adopted its original findings
on the likely volume, price effects and impact and found that
Consol. Court No. 00-07-00373 Page 17
revocation of the subject orders would likely lead to continuation
or recurrence of material injury. The Court is satisfied that the
Commission fully complied with its instructions in NMB Remand and,
accordingly, affirms the Commission’s determination that revocation
of the antidumping duty orders on subject imports from France,
Germany, Italy, Japan, Singapore and the United Kingdom would
likely lead to continuation or recurrence of material injury to a
domestic industry within a reasonably foreseeable time.
C. Conclusion
Upon review of the record, and the arguments presented by the
parties on remand, the Court finds that the Remand Determination is
supported by substantial evidence on the record and in accordance
with law. Accordingly, it is hereby
ORDERED that the Remand Determination is affirmed in all
respects; and it is further
ORDERED that since all other issues have been decided, this
case is dismissed.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: August 5, 2004
New York, New York