Timken Co. v. United States

Slip Op. 04-17

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
:
THE TIMKEN COMPANY, :
:
Plaintiff, :
:
v. :
:
UNITED STATES, :
:
Defendant, :
: Court No.
and : 00-08-00386
:
NSK LTD. and NSK CORPORATION; :
NTN BEARING CORPORATION OF :
AMERICA, NTN BOWER CORPORATION, :
AMERICAN NTN BEARING MANUFACTURING :
CORPORATION and NTN CORPORATION; :
KOYO SEIKO CO., LTD. and KOYO :
CORPORATION OF U.S.A., :
:
Defendant-Intervenors. :
___________________________________:

[The United States International Trade Commission’s Remand
Determination is affirmed. Case dismissed.]

Stewart and Stewart (Terence P. Stewart and William A.
Fennell) for The Timken Company, plaintiff.

Lyn M. Schlitt, General Counsel, Office of the General
Counsel, United States International Trade Commission (Mary Jane
Alves and Andrea C. Casson) for the United States, defendant.

Crowell & Moring LLP (Robert A. Lipstein, Matthew P. Jaffe and
Grace W. Lawson) for NSK Ltd. and NSK Corporation, defendant-
intervenors.

Barnes, Richardson & Colburn (Donald J. Unger, Kazumune V.
Kano and David G. Forgue) for NTN Bearing Corporation of America,
NTN Bower Corporation, American NTN Bearing Manufacturing
Corporation and NTN Corporation, defendant-intervenors.
Court No. 00-08-00386 Page 2

Sidley Austin Brown & Wood LLP (Neil R. Ellis and Neil C.
Pratt) for Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.,
defendant-intervenors.

Dated: February 25, 2004

OPINION

I. Standard of Review

The Court will uphold the United StatesInternational Trade

Commission’s (“ITC” or “Commission”) 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) (1994). Substantial evidence is

“more than a mere scintilla. It means such relevant evidence as a

reasonable mind might accpet as adequate to support a conclusion.”

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 [same] evidence does not prevent an

administrative agency’s finding from being supported by substantial

evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).

II. Background

On April 24, 2003, this Court issued an order directing the

Commission to
Court No. 00-08-00386 Page 3

(a) explain the likely impact of TRB imports from Japan
on the entire United States TRB industry; (b) further
investigate and explain the basis that Japanese TRB
producers used to report their capacity to produce TRBs
to the Commission; and (c) further explain the
Commission’s findings in the context of the TRB business
cycle.

Timken Co. v. United States, 27 CIT __, __, 264 F. Supp. 2d 1264,

1285 (2003). On July 23, 2003, the ITC submitted its Remand

Determination. On August 22, 2003, NSK Ltd. and NSK Corporation

(collectively, “NSK”) filed comments with this Court in support of

the ITC’s remand determination. On September 2, 2003, The Timken

Company (“Timken”) filed comments regarding the Remand

Determination. Subsequently, on September 8, 2003, NTN

Corporation, NTN Bearing Corporation of America, American NTN

Bearing Manufacturing Corporation and NTN Bower Corporation

(collectively, “NTN”), Koyo Seiko Co., Ltd. and Koyo Corporation of

U.S.A. (collectively, “Koyo”), and NSK filed their respective

comments to Timken’s comments on the Remand Determination. The ITC

filed a response to Timken’s comments on September 15, 2003.

DISCUSSION

I. The ITC’s Findings Regarding Reported Capacity Information

A. Contentions of the Parties

1. Timken’s Contentions

Timken complains that the Commission erroneously determined

that Japanese producers lacked the capacity to increase exports to
Court No. 00-08-00386 Page 4

the United States. See Timken’s Comments Remand Determination

(“Timken’s Comments”) at 1-7. Timken asserts that the ITC “has

continued to base its volume holding on its finding that the

Japanese producers ‘were operating at extremely high capacity

utilization (95.5 percent in 1998).’” Id. at 2 (quoting Remand

Determination at 6). Timken maintains that the Commission wrongly

relied “solely on the capacity figures reported by the Japanese

producers for its volume determination.” Id. at 5. Timken asserts

that the capacity utilization data reported by the Japanese

producers is not accurate. See id. at 3-5 (citing proprietary

material). Moreover, Timken takes issue with the definition of

capacity that the ITC used to determine capacity utilization rates.

See id. at 4-5. Consequently, Timken deduces that the ITC failed

to measure actual capacity. See id. (citing proprietary material).

Timken also argues that the data the ITC relied upon is different

from the data provided by Timken from World Bearing Statistics.

See id. at 6. Finally, Timken complains that the methodology used

by the Commission led to an inaccurate volume determination. See

id. at 6-7 (citing proprietary material).

2. ITC’s Contentions

The Commission responds that it complied with the remand

instructions and reopened the agency record to investigate the

basis on which the Japanese tapered roller bearing (“TRB”)
Court No. 00-08-00386 Page 5

producers used to report their capacity to produce TRBs. Rebuttal

Comments of Def. ITC Regarding July 23, 2003, Five-Year Review

Remand Determination Concerning TRBs Japan (“ITC’s Comments”) at 2-

15. The Commission asserts that “Timken’s arguments have now

morphed into a disagreement about how the questionnaire responses

were tabulated and about the conclusions the Commission drew from

them.” Id. at 4. The ITC refutes Timken’s suggestion that there

is “mathematical error” in its computations “because the quantities

in the worksheets match the quantities reported in the

questionnaire responses, the addition in the worksheets is

verifiable by a hand calculator, and the results in the worksheets

match the information reported in the summary table and in turn

cited in the Commission’s determinations.” Id. at 5. In addition,

the ITC asserts that it applied its established methodology to

determine capacity utilization for foreign producers and the

domestic industry. See id.

The Commission further asserts that it complied with the

statutory requirements set forth in 19 U.S.C. § 1675a(a)(2)(A) by

recognizing that, “during the period of review the Japanese

industry as a whole operated at high capacity utilization rates

that exceeded 100 percent . . . .” Id. at 6. The Commission

maintains that it considered the likelihood of increased production

or existing unused production capacity in Japan. See id. The ITC
Court No. 00-08-00386 Page 6

further asserts that the Japanese producers provided additional

information, which was reconfirmed and recertified during the

remand proceedings, regarding the data previously reported in the

five-year review. See id. at 7-8. The ITC states that: “the fact

that individual Japanese producers may have been able to produce at

levels greater (or lower) than their reported average production

capacity such that their capacity utilization levels were greater

(or lower) than one hundred percent does not detract from the

reliability of the reported capacity information.” Id. at 8. The

ITC maintains that it “explicitly referenced and distinguished

information reported in specific questionnaire responses and

observed that ‘in general’ the average production capacity and

production information reported by Japanese producers” was based on

certain operating parameters. Id. at 6 (quoting proprietary

material).

3. NSK, Koyo, and NTN’s Contentions

NSK, Koyo and NTN generally agree with the ITC’s finding that

Japanese producers had high capacity utilization rates during the

period of review (“POR”). NSK’s Comments Supp. ITC’s Remand

Determination (NSK’s Comments”) at 1-3; Rebuttal Comments Def.-Int.

Koyo Timken’s Comments Remand Determination ITC (“Koyo’s Comments”)

at 2-6; NTN’s Rebuttal Comments Remand Determination (“NTN’s

Comments”) at 2-6. NSK points out that during the sunset review,
Court No. 00-08-00386 Page 7

the Commission “calculated an ‘actual’ capacity figure . . . while

the [World Bearing Statistics] calculated a ‘theoretical’ capacity

figure.” NSK’s Comments at 2-3. Consequently, NSK maintains that

the “two databases should not be confused [or compared] with one

another.” Id. at 3.

Koyo maintains that the definition of production capacity

proposed by Timken “is not based on the normal measure of capacity

used in the industry, but rather an ill-defined notion of maximum

theoretical capacity.” Koyo’s Comments at 3. The Commission

sought a realistic estimate of production capacity under normal

operating conditions and not a theoretical measure. See id. at 4.

Consequently, Koyo argues that “Timken’s reliance on a theoretical

notion of maximum production capacity is not a sufficient basis for

this Court to reject the Commission’s reliance on the capacity

utilization figures reported by the Japanese respondents . . . .”

Id.

Koyo further points out that Timken’s argument regarding the

use of data collected by the Japan Bearing Industrial Association

(“JBIA”) “ignores the numerous differences and shortcomings of the

JBIA data, which were spelled out by the Japanese respondents and

the Commission during this remand proceeding.” Id. at 5.

According to Koyo, “Timken’s argument is really nothing more than

a complaint about the manner in which the Commission weighed the
Court No. 00-08-00386 Page 8

evidence Timken submitted against the capacity utilization data

submitted by the Japanese respondents.” Id. at 6.

NTN adds that “Timken’s ability to show that there was data on

the record different from the data relied upon by the ITC is

insufficient to overturn the ITC’s decision.” NTN’s Comments at 2.

NTN asserts that the ITC reasonably concluded that its “own

certified, verifiable questionnaire responses were more likely to

reflect accurate data than were the JBIA’s reported figures.” Id.

at 4. NTN maintains that it is within the Commission’s discretion

to make decisions regarding the evidence before it and that “the

ITC made a reasoned decision based on that substantial record

evidence to accept the capacity utilization data reported by the

Japanese producers in their ITC questionnaire responses.” Id. at

6.

B. Analysis

The Court found that, during its sunset review, “the

Commission erred by not inquiring into the basis used by Japanese

TRB producers to report their capacity.” Timken, 27 CIT at ___,

264 F. Supp. 2d at 1280. The Commission issued remand

questionnaires to Japanese TRB producers requesting such producers

to “(1) review the average production capacity and production

information . . . and to report the number of shifts per day, the

number of days per week, and the number of weeks per year that were
Court No. 00-08-00386 Page 9

the basis for that information for the reported periods; [and] (2)

identify and quantify any idled equipment that was available to

produce TRBs in their Japanese facilities [for the POR].” Remand

Determination at 3-4. Based on the information collected from the

remand questionnaires, the ITC found “that Japanese producers had

extremely high capacity utilization rates during the period

examined in the five-year review.” Id. at 4. The Court does not

agree with Timken that the Commission’s volume determination is

unsupported by substantial evidence.

Timken argues that the definition of average production

capacity used by the ITC does not take into account any idle

equipment or the number of shifts used to determine production

capacity. See Timken’s Comments at 4-5. Accordingly, Timken

asserts that the faulty definition prevented the ITC from

accurately measuring the average production capacity for Japanese

producers. See id. Timken essentially requests the Court to

substitute the Commission’s understanding of capacity utilization

rates for Timken’s notion of such rates. In light of the record

evidence, the Court holds that the ITC was reasonable in

determining “that Japanese producers had extremely high capacity

utilization rates during the period examined in the five-year

review.” Remand Determination at 4. As the Court has previously

stated, “the question of whether the ITC conduc[ted] a thorough .
Court No. 00-08-00386 Page 10

. . investigation begins with the substantial evidence test, and

the question of whether, in light of the record evidence as a

whole, ‘it would have been possible . . .’” for the Commission to

have reasonably reached its final determination. Acciai Speciali

Terni S.p.A. v. United States, 24 CIT 1064, 1074, 118 F. Supp. 2d

1298, 1307 (2000) (quoting Allentown Mack Sales & Serv., Inc. v.

NLRB, 522 U.S. 359, 366-67 (1998)). In the case at bar, the

Commission gathered necessary information that considered whether

equipment remained idle and the number of shifts reported by the

Japanese producers. Moreover, Timken did not produce any evidence

to prove such information unreliable.

Timken contends that the Commission’s measure of capacity is

unsupported by the evidence because the basis for such measurement

was the capacity data reported by the Japanese producers. Timken’s

Comments at 3-4. The Commission asked the Japanese producers to

report:

The level of production that [they] could reasonably have
expected to attain during the specified period. Assume
normal operating conditions (i.e., using equipment and
machinery in place and ready to operate; normal operating
levels (hours per week/weeks per year) and time for
downtime, maintenance, repair, and cleanup; and a typical
or representative product mix).

Remand Determination at 3. Timken argues that it has presented

certain record evidence which demonstrates that this definition

does not accurately reflect the production capacity of Japanese
Court No. 00-08-00386 Page 11

producers. See Timken’s Comments at 4-5. The Court, however, does

not agree with Timken. The Court will not overturn the ITC’s

determination “merely because the plaintiff ‘is able to produce

evidence . . . in support of its own contentions and in opposition

to the evidence supporting the agency’s determination.’”

Torrington Co. v. United States, 14 CIT 507, 514, 745 F. Supp. 718,

723 (1990) (internal citations omitted), aff’d, 938 F.2d 1276 (Fed.

Cir. 1991). The Commission reasonably relied on the information

submitted by Japanese producers as well as their reconciliation of

such information with secondary information submitted by Timken.

The ITC recognized that Japanese producers’ capacity utilization

rates ranged from 95.5 to 104.2 percent. Remand Determination at

2. Furthermore, the ITC took into account the reported information

prior to making its determination. Accordingly, the Court will not

substitute the Commission’s determination based on record data with

Timken’s interpretation of such data.

The Court finds that the ITC reasonably determined that the

information received from the remand questionnaires was “the most

probative and reliable data.” Id. at 5. The Commission did not

take the Japanese producers’ responses at face value, but rather it

“required questionnaire respondents to certify the accuracy of
Court No. 00-08-00386 Page 12

their reported information.”1 Id. The ITC reasonably deduced that

the data submitted by Japanese respondents is more probative

because “the data submitted to the JBIA carry no certification

obligation, are not subject to verification or review by

independent entities, may be revised and adjusted, and are not

subject to the same rigors as information used in investigations

such as the Commission’s.” Id. at 6. The Commission determines

how to gather information and Timken has the burden of

demonstrating that the ITC’s methodology is contrary to law.

Torrington, 14 CIT at 514, 745 F. Supp. at 723. Here, Timken has

failed to meet this burden. Accordingly, the Court holds that the

ITC adequately investigated and explained the basis that Japanese

producers used to report their capacity to produce TRBs.

II. The ITC’s Likely Volume Determination with Respect to the
Domestic Industry as a Whole

A. Contentions of the Parties

1. Timken’s Contentions

Timken complains that the Commission erroneously concluded

that Japanese producers would not compete for the United States

market share because it would harm their United States affiliates.

See Timken’s Comments at 15-21. Timken asserts that the ITC,

1
It should be further noted that the responses were
subject to verification by the ITC and by people with access to the
data under a protective order. See Remand Determination at 5.
Court No. 00-08-00386 Page 13

conscious of this Court’s instructions, “chose on remand to

characterize its original finding that relationships with [United

States] affiliates would limit the volume of subject imports from

Japan as ‘an additional factor’ that would limit imports.” Id. at

16. Timken argues that the ITC minimized its previous finding

regarding the effect Japanese affiliates in the United States would

have on imports. See id. Timken maintains, however, that record

evidence indicates that each Japanese producer would be able to

compete for sales without affecting their United States affiliates’

sales. See id. at 17. Timken states that it submitted affidavits

from its sales associates showing that it often competes with the

Japanese TRB producers for certain accounts. See id. at 18.

Timken deduces that “a Japanese producer selling a [United States]-

made part to a customer that sources other part numbers from Timken

can import those other part numbers to compete with Timken without

interfering with its sales of [United States]-made products.”2 Id.

Finally, Timken complains that “the testimony of counsel for a

Japanese producer, the history of this finding and order, the

testimony of Timken’s salesmen, and the opinions of two

2
Timken seems to argue that the ITC should not revoke the
antidumping duty order because its profits margin may be harmed by
increased competition. The purpose of the antidumping duty
statute, however, is to protect United States industries not
specific corporations from unfair behavior by foreign competitors.
In the instant case, Japanese companies have established United
States affiliates to compete with United States corporations.
Court No. 00-08-00386 Page 14

Commissioners all support the proposition that Japanese producers

could increase imports without affecting their [United States]

production facilities.” Id. at 20.

2. ITC’s Contentions

The Commission responds that its analysis of the likely

subject import volume is consistent with the statutory requirements

of 19 U.S.C. § 1675a(a)(2). See ITC’s Comments at 10. The ITC

maintains that its likely subject import volume determination is

premised on several factors: (a) “the declining volume of subject

imports from Japan both absolutely and relative to production and

consumption in the United States since the imposition of the 1987

antidumping order;” (b) increased investment in United States

production facilities by Japanese producers; (c) the high capacity

utilization rates of Japanese producers; (d) “Japanese producers’

orientation toward home and third-country markets and the absence

of import barriers to Japanese TRB shipments to third countries;

[(e)] low Japanese inventory to shipment ratios”; and (f) the

expense and difficulty of product shifting. Id. at 11.

Consequently, the ITC states that its analysis, contrary to

Timken’s assertions, “was not limited to its findings concerning

Japanese producers’ capacity and capacity utilization levels.” Id.

The ITC asserts that Timken “misrepresents the weight accorded

Japanese producers’ capacity and capacity utilization information
Court No. 00-08-00386 Page 15

in both the original review determination and the remand

determination.” Id. at 9.

Furthermore, the Commission argues that it properly considered

the entire domestic industry in concluding that the volume of

subject imports would likely be small and “would not be likely to

suppress or depress domestic prices to a significant degree, and

was not likely to cause material injury to the domestic industry as

a whole . . . .” Id. at 15. The Commission takes issue with

Timken’s assertion that the volume of subject imports from Japan

could increase and affect the United States market without

competing with the products made by the Japanese producers’

domestic affiliates. The ITC maintains that this argument is

flawed because it relies on the assumption that likely volume of

subject imports from Japan would be significant upon revocation of

the order. See id. at 13. The Commission asserts that the record

evidence supports the opposite conclusion. See id. Japanese

producers’ extremely high capacity utilization levels and their

significant commitments to customers in their home and third

country markets support the ITC’s finding that the likely volume of

subject imports from Japan was not likely to be significant. See

id. at 13-14. The Commission found that “even if all available

Japanese production capacity were used to produce TRBs for the

[United States] market,” such capacity level was small. Id. at 13.
Court No. 00-08-00386 Page 16

3. NSK, Koyo, and NTN’s Contentions

NSK, Koyo and NTN agree that the ITC properly found that

imports of the subject merchandise were not likely to be

significant if the order is revoked. See NSK’s Comments Opp’n

Timken’s Comments Remand Determination (“NSK’s Opp’n Comments”) at

8-9; Koyo’s Comments 9-11; NTN’s Comments 9-11. NSK asserts that

the ITC correctly found that the relationship between Japanese

producers and their United States affiliates is a factor “that

would likely limit the volume of subject imports from Japan as

regards sales by the [United States] affiliates.” NSK’s Opp’n

Comments at 8. Defendant-intervenors maintain that the Commission

reviewed other record evidence from which it concluded that volume

of subject imports from Japan would not be significant. See id. at

8-9; Koyo’s Comments at 9; NTN’s Comments 9-10. Koyo states: “the

evidence on the record shows that, not only did the Japanese

producers [lack] the ability to substantially increase TRB

production in Japan for shipment to the United States, but they

also could not have easily shifted shipments to the United States

sales from other markets.” Koyo’s Comments at 10.

B. Analysis

Section 1675a(a)(4) (1994) of Title 19 of the United States

Code states that “in evaluating the likely impact of imports of the

subject merchandise on the industry if the order is revoked . . .
Court No. 00-08-00386 Page 17

the Commission shall consider all relevant economic factors which

are likely to have a bearing on the state of the industry in the

United States . . . .” The Court found that the ITC did not

“adequately explain why an increase in Japanese imports of the

subject merchandise would not injure the remaining United States

industry; that is, TRB producers other than those owned by Japanese

companies.” Timken, 27 CIT at ___, 264 F. Supp. 2d at 1278. The

Court, however, finds that on remand the Commission adequately

explains the impact an increase in volume of the subject imports

would have on the entire United States domestic industry.

The Commission reasonably determined that the domestic

industry would not be injured even if all available Japanese

production capacity were used to produce TRBs for the United States

market. See Remand Determination at 6. The ITC’s determination is

based on record evidence indicating what percentage of total

apparent United States consumption (by quantity) in 1998 a high

Japanese production level would constitute. The ITC further

explains that, based on the projected moderate growth of the TRB

industry, “any possible increase in subject import volume that

might occur within the reasonably foreseeable future likely would

come out of an increased demand in the market, not at the expense

of the domestic industry.” Id. at 6-7.
Court No. 00-08-00386 Page 18

The ITC based this determination on a number of factors,

including the relationship between the Japanese producers and their

United States affiliates. The Court does not agree with Timken

that the Commission re-characterized its original finding regarding

the significance of the relationship between the Japanese producers

and their United States affiliates. “It is within the Commission’s

discretion to make reasonable interpretations of the evidence and

to determine the overall significance of any particular factor or

piece of evidence.” NMB Sing. Ltd. v. United States, 27 CIT ___,

___, 288 F. Supp. 2d 1306, 1334 (2003) (quoting Maine Potato

Council v. United States, 9 CIT 293, 300, 613 F. Supp. 1237, 1244

(1985)). Here, the ITC clarified that the relationship between the

Japanese producers and their United States affiliates is an

additional factor that would likely limit the volume of subject

imports from Japan in the reasonably foreseeable future. The Court

finds that the ITC properly applied its discretion in weighing the

record evidence regarding the relationship between the Japanese

producers and their United States affiliates. The Court also finds

that the Remand Determination provides sufficient explanation as to

why an increase in imports from Japan would not injure the United

States domestic industry.
Court No. 00-08-00386 Page 19

III. The Commission’s Determination Regarding the TRB Industry’s
Business Cycle

A. Contentions of the Parties

1. Timken’s Contentions

Timken complains that the Commission erroneously concluded

that the TRB industry has no significant business cycle. See

Timken’s Comments at 7-15. Timken asserts that the record included

evidence demonstrating that the TRB industry had peaked and was

poised for a downturn. See id. at 8. Furthermore, Timken states

that “[b]ecause the Commission had already observed an industry

business cycle based on apparent consumption in the [United States]

TRB industry during the original investigation, the existence of a

TRB business cycle was an established fact already on the record.”

Id. at 9-10 (citing Tapered Roller Bearings and Parts Thereof, and

Certain Housings Incorporating Tapered Rollers from Hungary, The

People’s Republic of China, and Romania (“1987 Review”), Inv. Nos.

731-TA-341, 344, and 345 (Final), USITC Pub. 1983, List 1, PD 978,

at A-24 (June 1987)). Timken asserts that it supplemented

consumption data collected by the Commission showing that the

industry was experiencing peak demand during the POR, with

information about its own business and TRB customers. See Timken’s

Comments at 10.
Court No. 00-08-00386 Page 20

Timken contends that the information it submitted showed that

its TRB business devoted to a specific type of customer had peaked

and was likely to be on a downward cycle if the order were revoked.

See id. (citing proprietary material). Timken asserts that it

“tracked its own return on investment for a 20-year period which

showed clear peaks in 1987-88 and 1996-97.” Id. In addition,

Timken states that it submitted information indicating the reduced

demand already experienced by TRB customers in farm machinery,

mining machinery, power transmission, and steel products. See id.

at 11. Timken maintains that it responded to the declines in

demand for TRBs by limiting inventories and capital spending and

reducing employment levels. See id. at 12.

Timken complains that the Commission’s treatment of the data

is not consistent with its treatment of similar information in a

different review. See id. (citing Gray Portland Cement and Cement

Clinker from Japan, Mexico, and Venezuela, Inv. Nos. 303-TA-21

(Review) and 731-TA-451, 461, and 519 (Review), USITC Pub. 3361 at

40-41 (Oct. 2000)). Timken points out that the ITC “specifically

considered the fact that the demand cycle in that sunset review had

peaked with slower or no growth expected in the reasonably

foreseeable future.” Timken’s Comments at 12. Timken asserts that

“[l]ike the cement industry, the Commission found the TRB industry

to be capital intensive with ‘high fixed costs’ requiring high
Court No. 00-08-00386 Page 21

capacity utilization rates to maximize return on investment.” Id.

at 13. In the case at bar, however, Timken complains that the ITC

“did not consider the current condition of the industry in the

context of its business cycle as was done in Cement.” Id. Timken

also takes issue with the Commission’s approach of grouping

together all sizes and number of rows of TRBs to determine capacity

utilization. See id. Timken argues that in relying “only on

capacity utilization figures based on quantity [the ITC] did not

take into account the effect of the downturn among industrial

customers for bearings.” Id. at 15.

2. ITC’s Contentions

The Commission responds that it properly considered the

relevant economic factors within the context of the business cycle

and conditions of competition that are distinctive to the domestic

TRB industry. ITC’s Comments at 15-20. The ITC asserts that it

repeatedly requested information relevant to the domestic industry

regarding the business cycle and conditions of competition during

the five-year review. See id. at 16. According to the Commission,

these “requests did not yield much information evidencing a well-

defined business cycle, let alone information pertinent to the

domestic industry as a whole, or where the industry as a whole

would be positioned with respect to a business cycle in the

reasonably foreseeable future.” Remand Determination at 9. The
Court No. 00-08-00386 Page 22

ITC states that Timken repeats the arguments it previously made

before the agency, such as its argument that the ITC should be

bound by its findings in the original investigation. See ITC’s

Comments at 17-18. The ITC responds that this Court has found that

the ITC must consider its prior injury determination, but that

these findings are not dispositive. See id. at 18 (citing Timken,

264 F. Supp. 2d at 1274).

In addition, the ITC argues that, “contrary to Timken’s

assertion, the Commission never found the existence of a business

cycle in any of the underlying original investigations to this

five-year review.” Id. (emphasis in original). The Commission

points out that “the cite provided by Timken . . . is to a sentence

in a staff report that was never explicitly adopted in an opinion

of the Commission.” Id. at n.66. The ITC also asserts that its

proceedings are sui generis and that in the review at issue it

“found that there was not much information in these proceedings

evidencing a well-defined business cycle in [the TRB] industry, let

alone information pertinent to the domestic industry as a whole, or

where the industry as a whole would be positioned with respect to

a business cycle in the reasonably foreseeable future.” Id. at 18.

The Commission maintains that its analysis was based on the lack of

a distinctive business cycle in the TRB industry:

[I]ts conclusion that the domestic industry is not in a
vulnerable state, that the TRB market is expanding,
Court No. 00-08-00386 Page 23

apparent domestic consumption is increasing, the domestic
industry is highly concentrated and profitable, and the
domestic industry’s market share has increased to the
level held during the original 1987 investigation as
capacity and capacity utilization increased
substantially, as well as its conclusions concerning the
absence of significant likely volume and price effects.

Id. at 19. Finally, the ITC argues that “Timken simply has not

shouldered its burden under 28 U.S.C. § 2639(a)(1) to demonstrate

why the Commission’s remand determination is not supported by

substantial evidence or otherwise in accordance with law.” Id. at

20.

3. NSK, Koyo, and NTN’s Contentions

Defendant-intervenors agree that the Commission properly

concluded that the TRB domestic industry does not have an

independent business cycle, but rather relies on the business

cycles of its end-use customers. See NSK’s Opp’n Comments at 6-8;

Koyo’s Comments at 6-8; NTN’s Comments at 6-8. Koyo asserts that,

“[i]ndeed, Timken itself has acknowledged the fact that demand for

TRBs is derived from the business cycles of the downstream

industries.” Koyo’s Comments at 7. NSK contends that “substantial

facts thus support the Commission’s decision that, whereas various

TRB purchasers operate subject to their own distinctive business

cycles, TRB producers just respond to purchasers’ demands, and

consequently do not experience a business cycle of their own.”

NSK’s Opp’n Comments at 7. Koyo adds that the ITC’s analysis

sufficiently addresses its statutory responsibility to consider
Court No. 00-08-00386 Page 24

economic factors “within the context of the business cycle.” See

Koyo’s Comments at 7. Koyo also states that while Timken may not

agree with the ITC’s conclusions regarding the impact that the

business cycles of the end-user industries has on the business

cycle of the TRB industry, such disagreement solely concerns the

weighing of evidence which is not an issue for this Court to

decide. See id. at 7-8.

Koyo asserts that the Commission correctly veered from its

decision in a previous sunset review regarding a different industry

because the ITC’s determination is fact intensive. See id. at 8.

NTN adds that the previous review and the review at issue are not

similar because in the former case the ITC found the business cycle

to be tied to seasonal demands in consumption whereas, in the TRB

industry, the ITC determined that the business cycle is tied to

demand by a variety of industries and customers. See NTN’s

Comments at 8. Koyo asserts that the ITC’s decision in one sunset

review regarding the economic significance of the business cycle is

of limited value in a sunset review involving a different industry.

See Koyo’s Comments at 8.

B. Analysis

The Court is satisfied with the Commission’s explanation in

the Remand Determination of its consideration of relevant economic

factors in the context of the business cycle and the conditions of
Court No. 00-08-00386 Page 25

competition that are distinctive to the United States TRB industry.

The Commission explains that its requests for information regarding

the domestic business cycle “did not yield much information

evidencing a well-defined business cycle, let alone information

pertinent to the domestic industry as a whole, or where the

industry as a whole would be positioned with respect to a business

cycle in the reasonably foreseeable future.” Remand Determination

at 9. The Court finds that the ITC reasonably found that the

record in the review at issue does not indicate a specific business

cycle for the United States TRB industry.

The ITC also reasonably concluded that demand for TRBs is

“derived and driven by the demand for end-use products.” Id. at 10.

The Commission states that “[g]iven the wide variety of customers

and the multitude of distinct industries for which TRBs are used,

we do not find this industry to be characterized by a regular and

measurable business cycle that might be characteristic of other

industries.” Id. Section 1675a(a)(4) of Title 19 of the United

States Code directs the Commission to analyze “all relevant

economic factors described in this paragraph within the context of

the business cycle . . . .” In the original investigation, the TRB

industry’s business cycle was dependent on the business cycles of
Court No. 00-08-00386 Page 26

end-users.3 See 1987 Review, Pub. 1983, List 1, PD 978, at A-24.

Here, however, the ITC has sufficiently explained that it could not

find a discernable business cycle for the domestic TRB industry.

The Commission explains that

the diversity of customers and industries for which TRBs
are used, as well as the small share of the cost of the
finished products for which TRBs are used, limits the
effect that downturns in demand from particular customers
or user industries, particularly to the extent that at
any given time, TRB end user industries are likely at
different positions in their business cycles than other
TRB end user industries.

Remand Determination at 11. Based on its findings regarding the

diverse customer base and limited effect of downturns in demand,

the Commission reasonably concluded that the TRB industry does not

experience discernable “recurrent expansion and contraction of

economic activity.” BLACK ’S LAW DICTIONARY 192 (7th ed. 1999)

(defining “business cycle”) (emphasis added). Accordingly, the

Commission’s explanation of relevant factors in the context of the

appropriate business cycle for TRBs is reasonable and supported by

record evidence.

3
The Court notes that the Commission correctly asserts
that it did not find the existence of a business cycle in any of
its previous reviews concerning TRBs. See ITC’s Comments at 18.
Rather, the conclusions regarding the TRB industry’s business cycle
was contained in a staff report. See 1987 Review, Pub. 1983, List
1, PD 978, at A-24. The staff report states that “[t]here is very
little seasonality with regard to [United States] consumption of
[TRBs], primarily because the broad industrial base of the market
allows for independent industry consumption trends to offset each
other. There appears to be about a 4- to 6- year business cycle to
the [TRB] industry . . . .” Id.
Court No. 00-08-00386 Page 27

The Court does not agree with Timken’s assertion that the

Commission should follow its findings from an investigation

concerning different products altogether. See Timken’s Comments at

12-13. The Commission must take into consideration the many

economic variables unique to each review. Accordingly, there is

limited precedential value to previous reviews because the

Commission is not required to make identical determinations in

each. Instead, the Commission must independently consider each

subject import and the circumstances of each investigation as sui

generis. See Timken Co. v. United States, 2004 Ct. Intl. Trade

LEXIS 7 *54-55 (2004); Armstrong Bros. Tool Co. v. United States,

84 Cust. Ct. 102, 115, 489 F. Supp. 269, 279, C.D. 4848 (1980); see

also Citrusco Paulista, S.A. v. United States, 12 CIT 1196, 1209,

704 F. Supp. 1075, 1087 (1988). The ITC acted properly in

disregarding its findings from a review concerning different

subject imports and a different industry altogether. Accordingly,

the Court finds that the Commission sufficiently explained its

findings in the context of the appropriate business cycle as

mandated in Timken, 27 CIT at ___, 264 F. Supp. 2d at 1285.

CONCLUSION

The Court finds that the Commission sufficiently met its

burden of (a) explaining the likely impact of TRB imports from
Court No. 00-08-00386 Page 28

Japan on the entire United States TRB industry; (b) investigating

and explaining the basis used by Japanese TRB producers to report

their production capacity; and (c) explaining its findings in the

context of the appropriate business cycle. Judgment will be

entered accordingly.

/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: February 25, 2004
New York, New York