Timken U.S. Corp. v. United States

Slip Op. 04-7

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
TIMKEN U.S. CORPORATION, :
:
Plaintiff, :
:
v. :
:
UNITED STATES, :
:
Defendant, :
:
and :
:
NSK LTD., NSK-RHP EUROPE LTD., : Court No.
RHP BEARINGS LTD., NSK BEARINGS : 00-08-00385
EUROPE LTD. and NSK CORPORATION; :
NTN BEARING CORPORATION OF AMERICA, :
NTN BOWER CORPORATION, NTN-BCA :
CORPORATION and NTN CORPORATION; :
SKF USA INC. and SKF GmbH; FAG :
KUGELFISCHER GEORG SCHÄFER AG, THE :
BARDEN CORPORATION (U.K.) LIMITED, :
THE BARDEN CORPORATION, FAG ITALIA :
S.p.A. and FAG BEARINGS CORPORATION; :
KOYO SEIKO CO., LTD. and KOYO :
CORPORATION OF U.S.A., :
:
Defendant-Intervenors. :
________________________________________:

Plaintiff, Timken U.S. Corporation, moves pursuant to USCIT R.
56.2 for judgment upon the agency record challenging certain
aspects of the United States International Trade Commission’s
(“ITC” or “Commission”) final determination in Certain Bearings
From China, France, Germany, Hungary, Italy, Japan, Romania,
Singapore, Sweden, and the United Kingdom, 65 Fed. Reg. 39,925
(June 28, 2000), in which the ITC found that revocation of the
antidumping duty orders (ITC Inv. Nos. 731-TA-391-394, -397 and -
399) on cylindrical roller bearings (“CRBs”) from France, Germany,
Italy, Japan and the United Kingdom “would not be likely to lead to
continuation or recurrence of material injury to an industry in the
United States within a reasonably foreseeable time.” Specifically,
Timken challenges the determination with regard to CRBs from
France, Germany, Italy, Japan and the United Kingdom and contends,
Court No. 00-08-00385 Page 2

inter alia, that the ITC failed to: (1) properly assess the
importance of foreign affiliations with the domestic industry; (2)
adequately consider whether adverse price effects are likely; (3)
consider all relevant record evidence including data pertaining to
inventory levels, third country pricing and improvements in the
domestic CRBs industry; (4) consider the relevant economic factors
in the sunset review within the context of the business cycle; and
(5) consider the United States Department of Commerce’s
(“Commerce”) determination that dumping would likely recur
following revocation of the antidumping duty orders. Timken
further challenges certain aspects of Chairman Stephen Koplan and
Commissioner Thelma J. Askey’s separate views. The complete views
of the ITC were published in Certain Bearings From China, France,
Germany, Hungary, Italy, Japan, Romania, Singapore, Sweden, and the
United Kingdom (“Final Determination”), Inv. Nos. AA1921-143, 731-
TA-341, 731-TA-343-345, 731-TA-391-397, and 731-TA-399 (Review),
USITC Pub. 3309 (June 2000).

Held: Timken’s motion for judgment upon the agency record is
granted in part and denied in part. Case remanded to the ITC for
further explanation and investigation consistent with this opinion.

[Timken’s 56.2 motion is granted in part and denied in part. Case
remanded.]

January 27, 2004

Stewart and Stewart (Terence P. Stewart, Geert De Prest, Eric
P. Salonen and Amy A. Karpel) for Timkem U.S. Corporation,
plaintiff.

Lyn M. Schlitt, General Counsel, Office of the General
Counsel, United States International Trade Commission (Mark A.
Bernstein, Acting Assistant General Counsel, and John D.
Henderson), for the United States, defendant.

Crowell & Moring LLP (Robert A. Lipstein, Matthew P. Jaffe and
Grace W. Lawson) for NSK Ltd., NSK-RHP Europe Ltd., RHP Bearings
Ltd., NSK Bearings Europe 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, NTN-BCA Corporation and NTN Corporation,
Court No. 00-08-00385 Page 3

defendant-intervenors.

Steptoe & Johnson LLP (Herbert C. Shelley, Alice A. Kipel,
David N. Tanenbaum and Mary T. Mitchell) for SKF USA Inc. and SKF
GmbH, defendant intervenors.

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP (Max
F. Schutzman, Andrew B Schroth, Mark E. Pardo and Adam M. Dambrov)
for FAG Kugelfischer Georg Schäfer AG, The Barden Corporation
(U.K.) Limited, The Barden Corporation, FAG Italia S.p.A. and FAG
Bearings Corporation, defendant-intervenors.

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

OPINION

TSOUCALAS, Senior Judge: Plaintiff, Timken U.S. Corporation

(“Timken”),1 moves pursuant to USCIT R. 56.2 for judgment upon the

agency record challenging certain aspects of the United States

International Trade Commission’s (“ITC” or “Commission”) final

determination in Certain Bearings From China, France, Germany,

Hungary, Italy, Japan, Romania, Singapore, Sweden, and the United

Kingdom, 65 Fed. Reg. 39,925 (June 28, 2000), in which the ITC

found that revocation of the antidumping duty orders (ITC Inv. Nos.

731-TA-391-394, -397 and -399) on cylindrical roller bearings

(“CRBs”) from France, Germany, Italy, Japan, Sweden and the United

Kingdom “would not be likely to lead to continuation or recurrence

1
This action was brought by The Torrington Company that
was acquired by The Timken Company on February 18, 2003, and is now
known as Timken U.S. Corporation. The Court refers to plaintiff as
Timken U.S. Corporation in the caption and as Timken throughout
this opinion.
Court No. 00-08-00385 Page 4

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

reasonably foreseeable time.” Specifically, Timken challenges the

determination with regard to CRBs from France, Germany, Italy,

Japan and the United Kingdom and contends, inter alia, that the ITC

failed to: (1) properly assess the importance of foreign

affiliations with the domestic industry; (2) adequately consider

whether adverse price effects are likely; (3) consider all relevant

record evidence including data pertaining to inventory levels,

third country pricing and improvements in the domestic CRBs

industry; (4) consider the relevant economic factors in the sunset

review within the context of the business cycle; and (5) consider

the United States Department of Commerce’s (“Commerce”)

determination that dumping would likely recur following revocation

of the antidumping duty orders. Timken further challenges certain

aspects of Chairman Stephen Koplan and Commissioner Thelma J.

Askey’s separate views. The complete views of the ITC were

published in Certain Bearings From China, France, Germany, Hungary,

Italy, Japan, Romania, Singapore, Sweden, and the United Kingdom

(“Final Determination”), Inv. Nos. AA1921-143, 731-TA-341, 731-TA-

343-345, 731-TA-391-397, and 731-TA-399 (Review), USITC Pub. 3309

(June 2000).2

2
During the issuance of this determination, the Commission
was comprised of Chairman Koplan, Vice Chairman Okun and
Commissioners Bragg, Miller, Hillman and Askey. Vice Chairman
Okun, however, did not participate in the review. See Final
Court No. 00-08-00385 Page 5

Background

In May 1989 the ITC determined that a domestic industry was

likely to be injured as a result of CRBs imported into the United

States from certain countries that were likely to be sold at less

than fair value (“LTFV”). See Antifriction Bearings (Other Than

Tapered Roller Bearings) and Parts Thereof from the Federal

Republic of Germany, France, Italy, Japan, Romania, Singapore,

Sweden, Thailand, and the United Kingdom (“Original

Investigation”), Inv. Nos. 303-TA-19 and 20 (Final) and 731-TA-

391—399 (Final), USITC Pub. 2185 (May 1989). On May 15, 1989,

notices of antidumping duty orders were published in the Federal

Register with respect to CRBs imported from various countries,

including France, Germany, Italy, Japan and the United Kingdom.

See Antidumping Duty Orders on Ball Bearings, Cylindrical Roller

Bearings, and Spherical Plain Bearings and Parts Thereof From the

Federal Republic of Germany, 54 Fed. Reg. 20,900; Antidumping Duty

Orders on Ball Bearings, Cylindrical Roller Bearings, Spherical

Plain Bearings, and Parts Thereof From France, 54 Fed. Reg. 20,902;

Antidumping Duty Orders on Ball Bearings and Cylindrical Roller

Bearings, and Parts Thereof From Italy, 54 Fed. Reg. 20,903;

Antidumping Duty Orders on Ball Bearings, Cylindrical Roller

Bearings, and Spherical Plain Bearings, and Parts Thereof From

Determination, USITC Pub. 3309 at 1 n.2.
Court No. 00-08-00385 Page 6

Japan, 54 Fed. Reg. 20,904; Antidumping Duty Orders and Amendments

to the Final Determinations of Sales at Less Than Fair Value on

Ball Bearings, and Cylindrical Roller Bearings and Parts Thereof

From the United Kingdom, 54 Fed. Reg. 20,910.

On April 1, 1999, the Commission issued notice of its five-

year (“sunset”) reviews, concerning antidumping duty orders on

certain bearings, including CRBs from France, Germany, Italy, Japan

and the United Kingdom, to determine whether revocation of the

orders would be likely to lead to continuation or recurrence of

material injury. See Certain Bearings From China, France, Germany,

Hungary, Italy, Japan, Romania, Singapore, Sweden, and the United

Kingdom, 64 Fed. Reg. 15,783. On July 2, 1999, the Commission

determined that it would conduct full reviews.3 See Certain

Bearings From China, France, Germany, Hungary, Italy, Japan,

Romania, Singapore, Sweden, and the United Kingdom, 64 Fed. Reg.

38,471 (July 16, 1999). Notice regarding scheduling a public

hearing was published on August 27, 1999, see Certain Bearings from

China, France, Germany, Hungary, Italy, Japan, Romania, Singapore,

Sweden, and the United Kingdom, 64 Fed. Reg. 46,949-50, and the

hearing, allowing all interested parties to comment, was held on

3
In a five-year review, the ITC may conduct a full review,
which includes a public hearing, issuance of questionnaires and
other procedures, or an expedited review not encompassing such
procedures. See 19 C.F.R. §§ 207.60(b)–(c) & 207.62(c)–(d) (1999).
Court No. 00-08-00385 Page 7

March 21, 2000. See Final Determination, USITC Pub. 3309 at 2.

The Commission made a final determination regarding the effect

of revoking the antidumping duty orders on CRBs from France,

Germany, Italy, Japan and the United Kingdom in June 2000, and

concluded that lifting the orders would not likely lead to

continuation or recurrence of material injury to any domestic

industry within the reasonably foreseeable future.4 See Final

Determination, USITC Pub. 3309 at 1-2. Timken advances several

challenges to the Commission’s negative determination and contends

that the finding was unsupported by substantial evidence or

otherwise contrary to law because of its reliance on, inter alia,

illogical reasoning, inconsistent record evidence and incorrect

conclusions regarding price underselling and domestic market

vulnerability. See Timken’s Br. Supp. R. 56.2 Mot. J. Agency R.

4
The Commission’s views as to CRBs were expressed by
Chairman Koplan and Commissioner Hillman. The Commission voted 4
to 1 in favor of revocation with respect to the United Kingdom and
3 to 2 in favor of revocation with respect to France, Germany,
Italy and Japan. Commissioner Askey concurred with the
Commission’s findings, but wrote separately and joined in the
Commission’s discussion of the domestic like product, domestic
industry and related parties. Final Determination, USITC Pub.
3309, Concurring and Dissenting Views of Commissioner Thelma J.
Askey (“Askey’s Views”) at 115. Commissioner Bragg dissented with
the Commission with respect to CRBs from France, Germany, Italy and
Japan. Final Determination, USITC Pub. 3309, Separate and
Dissenting Views of Commissioner Lynn M. Bragg at 65. Commissioner
Miller dissented with the Commission with respect to CRBs from
France, Germany, Italy, Japan and the United Kingdom. Final
Determination, USITC Pub. 3309, Separate and Dissenting Views of
Commissioner Marcia E. Miller at 83.
Court No. 00-08-00385 Page 8

(“Timken’s Br.”) at 1-7. The ITC and defendant-intervenors, NSK

Ltd., NSK-RHP Europe Ltd., RHP Bearings Ltd., NSK Bearings Europe

Ltd. and NSK Corporation (collectively “NSK”), NTN Bearing

Corporation of America, NTN Bower Corporation, NTN-BCA Corporation

and NTN Corporation (collectively “NTN”), SKF USA Inc. and SKF GmbH

(collectively “SKF”), and FAG Kugelfischer Georg Schäfer AG, The

Barden Corporation (U.K.) Limited, The Barden Corporation, FAG

Italia S.p.A. and FAG Bearings Corporation (collectively “FAG”),

oppose Timken’s claims. Defendant-intervenors, Koyo Seiko Co.,

Ltd. and Koyo Corporation of U.S.A., did not supply the Court with

opposition briefs to Timken’s motion for judgment upon the agency

record.

Jurisdiction

The Court has jurisdiction over this matter pursuant to 19

U.S.C. § 1516a(a)(2)(A)(i)(I) (2000) and 28 U.S.C. § 1581(c)

(2000).

Standard of Review

The Court will uphold the Commission’s final determination in

a full five-year sunset review 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); see NTN Bearing

Corp. of America v. United States, 24 CIT 385, 389-90, 104 F. Supp.

2d 110, 115-16 (2000)(detailing the Court’s standard of review for
Court No. 00-08-00385 Page 9

agency determinations). “‘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.’” Matsushita

Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir.

1984)(quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229

(1938)). “[T]he possibility of drawing two inconsistent

conclusions from the [same] evidence does not” preclude the Court

from holding that the agency finding is supported by substantial

evidence. Consolo v. Federal Mar. Comm’n, 383 U.S. 607, 620

(1966). An agency determination will not be “overturned 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 citation

omitted), aff’d, 938 F.2d 1276 (Fed. Cir. 1991).

Discussion

I. Statutory Background

In a five-year review, the ITC determines whether revocation

of an antidumping duty order would likely “lead to continuation or

recurrence of dumping . . . [and] material injury.” 19 U.S.C. §

1675(c)(1) (1994). The Statement of Administrative Action (“SAA”)5

5
The SAA represents “an authoritative expression by the
Administration concerning its views regarding the interpretation
(continued...)
Court No. 00-08-00385 Page 10

clarifies that the standard applied to determine whether it is

“likely” that material injury will continue or recur is different

from the standards applied in material injury or threat of material

injury determinations. See H.R. Doc. No. 103-465, at 883 (1994),

reprinted in 1994 U.S.C.C.A.N. at 4209. Specifically, “under the

likelihood standard, the Commission will engage in a counter-

factual analysis: it must decide the likely impact in the

reasonably foreseeable future . . . [due to] revocation” of an

antidumping duty order. H.R. Doc. No. 103-465, at 883-84,

reprinted in 1994 U.S.C.C.A.N. at 4209.

In its 19 U.S.C. § 1675a(a)(1) (1994) determination, the

Commission continuously considers “the likely volume, price effect,

and impact of imports of the subject merchandise on the industry if

the order is revoked . . . .” Title 19 of the United States Code

also states that the Commission shall consider:

(A) its prior injury determinations, including the
volume, price effect, and impact of imports of the
subject merchandise on the industry before the order was

(...continued)
and application of the Uruguay Round agreements.” H.R. Doc. No.
103-316, at 656 (1994), reprinted in 1994 U.S.C.C.A.N. 4040. “It
is the expectation of the Congress that future Administrations will
observe and apply the interpretations and commitments set out in
this Statement.” Id.; see also 19 U.S.C. § 3512(d) (1994) (“The
statement of administrative action approved by the Congress . . .
shall be regarded as an authoritative expression by the United
States concerning the interpretation and application of the Uruguay
Round Agreements and this Act in any judicial proceeding in which
a question arises concerning such interpretation or application.”)
Court No. 00-08-00385 Page 11

issued . . . ,

(B) whether any improvement in the state of the
industry is related to the order . . . ,

(C) whether the industry is vulnerable to material
injury if the order is revoked . . . , and

(D) in an antidumping proceeding under [19 U.S.C.
§ 1675(c)] . . . , the findings of the administering
authority regarding duty absorption under [19 U.S.C. §
1675(a)(4)] . . . .

19 U.S.C. § 1675a(a)(1)(A)-(D). Guidance regarding the basis for

the Commission’s determination is also provided in 19 U.S.C. §

1675a(a)(5). In pertinent part, the statute reads that:

[t]he presence or absence of any factor which the
Commission is required to consider under [19 U.S.C. §
1675a] shall not necessarily give decisive guidance with
respect to the Commission’s determination of whether
material injury is likely to continue or recur within a
reasonably foreseeable time if the order is revoked . .
. . In making that determination, the Commission shall
consider that the effects of revocation . . . may not be
imminent, but may manifest themselves only over a longer
period of time.

19 U.S.C. § 1675a(a)(5). The SAA adds that although the Commission

must consider all factors listed in 19 U.S.C. § 1675a(a)(1)(A)-(D),

“no one factor is necessarily dispositive.” H.R. Doc. No. 103-465,

at 886, reprinted in 1994 U.S.C.C.A.N. at 4211.

II. Commission Findings

In the case at bar, the ITC determined that revocation of the

antidumping duty orders on CRBs from France, Germany, Italy, Japan

and the United Kingdom (“the subject countries”) would not likely
Court No. 00-08-00385 Page 12

lead to continuation or recurrence of material injury to a domestic

industry within a reasonably foreseeable time. See Final

Determination, USITC Pub. 3309 at 1-2. To determine whether CRBs

from the subject countries would compete with each other and with

domestic like products, the ITC generally considers four factors,

which include:

(1) the degree of fungibility between the imports from
different countries and between imports and the domestic
like product, including consideration of specific
customer requirements and other quality related
questions; (2) the presence of sales or offers to sell in
the same geographical markets of imports from different
countries and the domestic like product; (3) the
existence of common or similar channels of distribution
for imports from different countries and the domestic
like product; and (4) whether the imports are
simultaneously present in the market.

Id. at 17 n.112 (referencing Wieland Werke, AG v. United States, 13

CIT 561, 563, 718 F. Supp. 50, 52 (1989) (stating the factors

considered by the ITC in a prior final determination)). However,

since sunset reviews are prospective in nature, the ITC also

considers additional “significant conditions of competition that

are likely to prevail if the orders [on CRBs from the subject

countries] are revoked.” Final Determination, USITC Pub. 3309 at

17.

A. Cumulation

The ITC cumulated subject imports from the subject countries

upon specific findings that were based on the available information
Court No. 00-08-00385 Page 13

regarding the capacity and export orientation of the CRBs

industries in France, Germany, Italy, Japan and the United

Kingdom.6 See id. at 43. These findings were: (1) “subject

imports from all five countries would be likely to have a

discernible adverse impact on the domestic industry if the orders

were revoked”; and (2) “a reasonable overlap of competition between

the subject imports and the domestic like product is likely to

exist if the orders were revoked.” Id.

B. Conditions of Competition

In the Final Determination, the ITC discusses several

conditions of competition in the CRBs market that are unlikely to

change in the reasonably foreseeable future. One such condition

is that the domestic demand for CRBs has rapidly increased and that

the ITC forecasts further growth for the near future. See id. at

45. This increased demand is a result of: (1) a revitalization of

the domestic automotive industry; (2) an increase in air travel;

(3) an increased demand for products traditionally using CRBs for

operation; and (4) the creation of new bearing dependent products.

See id. at 46.

The second condition considered by the ITC is that there will

be a continued increase in demand for customized CRBs created by

6
The ITC’s findings on cumulation are not at issue in this
case.
Court No. 00-08-00385 Page 14

the automotive industry. See id. at 46-47. The third condition is

that Timken, the dominant domestic producer, will continue to

increase its production capacity throughout the period of review

(“POR”). Finally, the ITC acknowledges that “CRBs are typically

produced on dedicated machinery, and it is difficult and expensive

to shift production lines from one type of bearing to another.”

Id. at 47 (citation omitted).

C. Revocation of the Orders on CRBs from the Subject
Countries

1. Likely Volume of Subject Imports

The ITC determined that any increase of the volume of subject

imports that may result from the revocation of the antidumping duty

orders is not likely to be significant due to the strong and

growing demand for CRBs and the strength of the domestic industry.

See id. at 48. This determination is based, in large part, on the

fact that “most of the major subject producers are related to

domestic producers, either through direct ownership or through a

common parent company. The record indicates that foreign producers

have a strong and long-standing interest in U.S. production, and

that this commitment is unlikely to change in the reasonably

foreseeable future.” Id. (citation omitted).
Court No. 00-08-00385 Page 15

2. Likely Price Effects of Subject Imports

Based on record evidence, the ITC further concluded that it is

unlikely that subject imports will have significant price effects

on the domestic industry in the event that the orders are revoked.

According to the ITC, most of the subject producers are related to

domestic producers, therefore making it unlikely that any subject

producer will engage in pricing behavior that would be injurious to

its domestic affiliated producer. See id. at 49. Moreover, since

the CRBs market is highly customized, the importance of non-price

factors, such as “the ability to provide technical support and high

delivery reliability,” make price a lesser concern in purchasing

decisions. Id.

3. Likely Impact of Subject Imports

In the Final Determination, the ITC also found an improvement

in the domestic CRBs industry since the antidumping duty orders

were imposed and concluded that the United States industry is not

currently vulnerable. See id. at 50. Specifically, the Commission

found:

The CRB[s] industry was clearly ailing during the period
of the original investigation, with low or negative
income and anemic capacity utilization. The years since
the imposition of the orders have brought a dramatic
expansion of the industry overall. . . . The number of
production workers rose from 1,900 in 1987 to 4,160 in
1998. The ratio of operating income to net sales rose
from 1.4 percent in 1987 to a very healthy 13.9 percent
in 1998. Domestic producers have even increased exports
relative to the period of the original investigations.
Court No. 00-08-00385 Page 16

By any measure, the domestic CRB[s] industry is
significantly stronger now than it was during the period
of the original investigations and is not currently
vulnerable to material injury.

Id. at 50 (citations omitted).

III. Analysis

A. The Affiliations Between Domestic Producers and Subject
Foreign Producers

1. Contentions of the Parties

In its moving brief, Timken contends that the Commission

erred in determining that increases in import volume or adverse

price effects were not likely because some domestic producers were

related to some subject foreign exporters. See Timken’s Br. at 37-

47. Specifically, the ITC found that certain domestic CRBs

producers were owned by producers domiciled in four subject

countries. See id. at 37. Timken takes issue with the ITC’s

conclusion that “increases in import volume were unlikely[] because

the subject foreign producers could be expected to avoid increases

in import volume which would harm their own affiliates in the

United States.” Id. at 37-38. Timken begins its argument by

presenting a syllogism, on which it claims the Commission’s Final

Determination was based, and finds error in the syllogism’s

conclusion that subject producers will not increase imports in
Court No. 00-08-00385 Page 17

order to protect their domestic interests.7 See Timken’s Br. at

40-44. Timken also argues that the ITC erred by failing to

adequately explain how it reached its determination regarding

affiliated producers. See id. at 43. Moreover, Timken complains

that the ITC violated the antidumping statute by failing to examine

the likely import volume and price effects in the context of the

domestic industry as a whole. See id. at 43-44. According to

Timken, since the ITC failed to exclude

any related parties from the domestic industry database,
the domestic industry as [a] whole comprised the
affiliates of all foreign producers and all U.S. owned
producers. . . . Without an examination of the likely
competitive behavior of foreign producers towards the
U.S. affiliates of other foreign producers and U.S.-owned
producers, the Commission has not complied with [19
U.S.C. § 1677(4) (1994)].

7
The Court does not agree that the syllogism presented by
Timken accurately reflects the reasoning of the agency. The ITC
considered the presence of multinational CRBs producers in the
United States a factor that indicates that subject producers are
unlikely to increase the volume of subject imports in order to
protect their domestic affiliations. Specifically, the ITC found
that the CRBs market is dominated by several global producers with
facilities in various markets, including the United States. See
Final Determination, USITC Pub. 3309 at 47. These producers
accounted for a substantial percentage of domestic CRBs shipments
measured by cumulated production of the subject merchandise in
1998. See id. The ITC further found that “expansion of overseas
facilities by these multinational companies reflects in part a
trend to localize production facilities in response to customers’
needs.” Def. ITC’s Opp. Timken’s Mot. J. Agency R. (“ITC’s Opp’n”)
at 13 (emphasis added). However, the ITC did not base its volume
determination on this factor alone. The Commission also considered
the current strength of the domestic CRBs industry and the growing
demand for CRBs and customized CRBs in the domestic industry. See
Final Determination, USITC Pub. 3309 at 46-47.
Court No. 00-08-00385 Page 18

Id. at 43 (emphasis in original).

Timken further argues that the ITC has no precedent to base

its negative determination that some domestic producers had

affiliations with the subject companies. See id. at 44. According

to Timken, in at least sixty-three prior reviews, the ITC did not

consider the impact of foreign investment by a subject producer in

reaching its final determination.8 See id. at 44-45. Timken

specifically cites Gray Portland Cement and Cement Clinker From

Japan, Mexico, and Venezuela (“Gray Portland Cement”), Inv. Nos.

303-TA-21 (Review) and 731-TA-451, 461, and 519 (Review), USITC

Pub. 3361 (Oct. 2000), where the Commission found “injurious import

volume and price effects were likely even though 60% of the

domestic production was foreign owned.” Timken’s Br. at 45

(emphasis in original).

Timken also points out that the ITC’s determination is

inconsistent with its prior findings with regard to the CRBs

industry. See id. at 46-47. According to Timken, in the original

8
Timken distinguishes 12-Volt Motorcycle Batteries From
Taiwan, Inv. No. 731-TA-238 (Final), USITC Pub. 2213 (Aug. 1989),
where the ITC found it is reasonable to infer that one company,
which dominated the domestic industry and was owned by a Japanese
parent company that was also parent company to the competing
foreign producer, was not threatened with material injury by
foreign imports from the same foreign producer. See Timken’s Br.
at 44 n.68. (citation omitted); see also 12-Volt Motorcycle
Batteries From Taiwan, 54 Fed. Reg. 35,089 (Aug. 23, 1989).
Court No. 00-08-00385 Page 19

investigation, the ITC found that eight United States CRBs

producers were foreign owned. However, the Commission still

determined that “‘there is no evidence that such producers are

‘shielded’ from the impact of unfairly traded imports.’” Id. at 47

(citing Original Investigation, USITC Pub. 2185 at A-62). This

finding was made despite the fact that foreign owned producers

experienced “significant operating losses during the first two

years of the original investigation period.” Id.

The ITC rejects Timken’s arguments regarding affiliations

between foreign producers and domestic producers of CRBs. See

Def.’s Opp’n at 12. The Commission found that the CRBs market is

dominated by several global producers with affiliations in the

domestic market. See id. Commissioner Askey made “comparable

findings that these affiliations would be a disincentive for

producers of subject merchandise to increase exports to the United

States or engage in pricing behavior that would be injurious to the

domestic industry.” Id. at 14; see Askey’s Views, USITC Pub. 3309

at 151-53.

The ITC also claims that Timken’s arguments regarding possible

incentives that would lead the subject producers to increase export

volumes ignores the conditions of competition identified by the

Commission in the Final Determination. See Def.’s Opp’n at 14-15.

According to the ITC:
Court No. 00-08-00385 Page 20

the Commission found that the expansion of such
affiliations was part of a global trend among the large
multinational producers to localize production facilities
in response to customer’s needs. This incentive to serve
customers with localized production facilities in the
United States would remain regardless of whether the
antidumping orders were revoked, particularly given the
importance U.S. purchasers attach to such non-price
factors as technical support and high delivery
reliability.

Moreover, the foreign producers’ significant
investment in their U.S. affiliates to add production
capacity creates a further disincentive to undercut their
affiliates. The Commission found that the CRB[s]
industry is capital-intensive and must operate at high
capacity utilization rates to be profitable. It
additionally found that it is difficult for CRB[s]
producers to shift from producing one type of bearing to
another, and difficult for U.S. producers to shift sales
to markets outside the United States.

Id. at 15-16 (citations and footnotes omitted). The ITC argues

that Timken fails to provide any credible explanation of the

incentive of foreign producers to engage in activity harmful to

their domestic affiliates. See id. at 16. In addition, the ITC

contends that even large Japanese CRBs producers, without domestic

affiliates, are unlikely to engage in injurious activities because

“‘[t]he industry in Japan is heavily oriented towards its home

market.’” Id. at 17 (citation omitted). Finally, the ITC rejects

Timken’s argument that the Commission failed to consider the

domestic industry as a whole, and focused only on foreign

producers’ investments in domestic affiliates. See id. at 16-18.
Court No. 00-08-00385 Page 21

NSK, NTN, SKF and FAG generally support the arguments espoused

by the ITC. NSK adds that neither the antidumping statute nor its

legislative history require the Commission to “address each factor

or piece of evidence it considered” in a sunset review

determination. Resp. Br. Opp’n Timken’s Mot. J. Agency R. (“NSK’s

Resp.”) at 13 (emphasis omitted). NTN also clarifies that the

record indicates that five, and not four, domestic CRBs producers

are owned by CRBs producers that are domiciled abroad. Resp. NTN

Timken’s Jan. 22, 2001 Br. Supp. Mot. J. Agency R. at 9. NTN

considers this fact additional evidence that supports a finding

that the Final Determination is supported by substantial evidence.

See id.

2. Analysis

Timken argues that since foreign affiliations with the

domestic industry was not a relevant factor in the Commission’s

original determination or in sixty-three prior antidumping cases,

the ITC’s current determination is illogical, unsupported by

substantial evidence and otherwise contrary to law. See Timken’s

Br. at 37-47. The Court agrees with Timken that it is anomalous to

consider foreign investment in the domestic industry as a relevant

factor in the determination under review, while failing to consider

the same factor in the original investigation. It is important to

note, however, that the ITC’s Final Determination was not dependent
Court No. 00-08-00385 Page 22

on one single factor, namely, affiliations between foreign and

domestic CRBs producers, but rather considered various other

conditions. See Final Determination, USITC Pub. 3309 at 45-49

(discussing, inter alia, the general increase in demand for CRBs,

increases in domestic shipments of CRBs in the United States and

abroad, and the high demand for customized CRBs). Moreover, the

SAA explains that the standard applied to determine whether it is

“likely” that material injury will continue or recur, applicable in

sunset reviews, is different from the standards applied in material

injury or threat of material injury determinations, applicable in

original investigations. See H.R. Doc. 103-465, at 883, reprinted

in 1994 U.S.C.C.A.N. at 4209. The SAA explains that in a five-year

review, the Commission “engage[s] in a counter-factual analysis” to

determine the likely impact of revocation “in the reasonably

foreseeable future of an important change in the status quo . . .

.” Id. at 884. Similar to other reviews discussed by Timken, the

Commission weighed all of the evidence before it and reasonably

concluded that the subject producers presently lack incentive to

increase imports of subject merchandise in the reasonably

foreseeable future. The ITC based its volume and price findings,

in part, on

the Commission’s analysis of the economic incentives
arising out of the relationships of producers of subject
merchandise with their domestic affiliates, incentives
that would likely affect their behavior toward the entire
domestic industry, including the domestic producers with
Court No. 00-08-00385 Page 23

which they [are] not affiliated.

Def.’s Opp’n at 18.

Legislative intent makes clear that “a reviewing court is not

barred from setting aside [an agency] decision when it cannot

conscientiously find that the evidence supporting that decision is

substantial, when viewed in the light that the record in its

entirety furnishes, including the body of evidence opposed to the

[agency’s] view.” Universal Camera Corp. v. NLRB, 340 U.S. 474,

488 (1951) (emphasis added). See, e.g., Gerald Metals, Inc. v.

United States, 132 F.3d 716, 720 (Fed. Cir. 1997) (clarifying the

standard of review for ITC determinations). Therefore, it was

reasonable for the Commission to review the entire administrative

record and consider affiliations between domestic producers and

subject foreign CRBs producers a factor in its five-year review.

However, Timken is correct in its assertion that the Final

Determination fails to adequately examine the likely competitive

behavior of foreign producers towards the domestic affiliates

unrelated to the subject importers. Since 19 U.S.C. § 1675a(a)(4)

explicitly directs the Commission to evaluate “the likely impact of

imports of the subject merchandise on the [domestic] industry,” the

Court remands the Final Determination for further explanation of

the likely import volume and price effects in the context of the

domestic industry as a whole.
Court No. 00-08-00385 Page 24

B. The Commission’s Finding that Concentration in the
Domestic CRBs Industry Will Prevent Injurious Price
Effects

1. Contentions of the Parties

Timken argues that the Commission fails to adequately explain

the connection between foreign producers’ concentration in the

domestic industry and the conclusion that adverse price effects are

not likely. See Timken’s Br. at 49. Moreover, Timken contends

that “there is no support in the record that the number of

producers or the relative market share of any one producer had any

impact whatsoever on competition generally, or on prices

specifically, so as to be able to prevent adverse price effects

from occurring.” Id. (emphasis in original omitted). Timken also

claims that the ITC’s price effects finding is completely

inconsistent with past precedent. See id. at 50-51. Timken

concludes its argument by citing certain record evidence that

Timken claims supports the conclusion that injurious price effects

are likely in the event of revocation. See id. at 53-58.

The ITC argues that the Commission relied on several factors

in concluding that revocation would unlikely lead to significant

price effects. See Def.’s Opp’n at 23. Such factors include: (1)

CRBs were frequently customized to some extent for particular

purchasers; (2) consumers of CRBs greatly relied on non-pricing

factors in deciding what CRBs to purchase; (3) most of the subject
Court No. 00-08-00385 Page 25

producers were affiliated with producers of the domestic like

products; and (4) the pricing data collected by the Commission

proved to be inconclusive to make an affirmative injury

determination. See id. The ITC also attacks Timken’s arguments

regarding likely price effects by stating that Timken almost

exclusively focuses on the Commission’s discussion of industry

concentration and disregards the other aspects of the Commission’s

pricing analysis. See id.

NSK, NTN, SKF and FAG generally support the arguments

presented by the ITC. NSK adds that the Commission found the CRBs

market to be inelastic and, therefore, generally not affected by

fluctuations in price. See NSK’s Resp. at 21. NSK further argues

that since CRBs are usually manufactured for highly specialized

uses, substituting a producer is very difficult and, therefore,

highly unlikely. See id. at 22.

2. Analysis

The United States Code directs the ITC to conduct a sunset

review five years after the publication of an antidumping duty

order or a prior sunset review. See 19 U.S.C. § 1675(c)(1). In a

sunset review, the ITC determines “whether revocation of an order

. . . would be likely to lead to continuation or recurrence of

material injury within a reasonably foreseeable time.” 19 U.S.C.

§ 1675a(a)(1). Such a determination takes into account the likely
Court No. 00-08-00385 Page 26

volume, price effect and impact of the subject imports if the order

were revoked. See id.

In evaluating the likely price effects of subject imports, the

Commission is directed to consider whether:

(A) there is likely to be significant price
underselling by imports of the subject merchandise as
compared to domestic like products, and

(B) imports of the subject merchandise are likely to
enter the United States at prices that otherwise would
have a significant depressing or suppressing effect on
the price of domestic like products.

19 U.S.C. § 1675a(a)(3)(A)-(B). In the Final Determination, the

ITC based its negative price effects conclusion on limited pricing

data. See Final Determination, USITC Pub. 3309 at 49. This data

showed “no clear pattern” of injurious behavior from the subject

producers. See id. However, based on additional non-price record

evidence, the ITC made the determination that the subject producers

would not engage in any pricing behavior that would injure their

domestic affiliates. See id. In the Final Determination and its

brief opposing Timken’s 56.2 motion, the ITC emphasized the

importance of these non-price related factors that influence the

CRBs market, including the ability of a producer to provide

technical support and high delivery reliability. See Def.’s Opp’n

at 15; Final Determination, USITC Pub. 3309 at 49.
Court No. 00-08-00385 Page 27

In its pricing determination, the ITC considered the effects

of domestic industry concentration “not as an independent factor

indicating that revocation of the order would not have significant

price effects, but rather only as relevant to the question of

whether producers of subject merchandise would engage in pricing

behavior that would injure their domestic affiliates.” Def.’s

Opp’n at 25. In attacking the ITC’s price effects analysis, Timken

merely isolates the ITC’s analysis on industry concentration, and

fails to consider the additional findings relied on by the

Commission in making its negative price effects determination. One

such finding is that quality and not price is the most important

factor when determining whether to purchase particular CRBs. See

Final Determination, USITC Pub. 3309 at 49. Accordingly, the Court

upholds the Commission’s determination that, among other factors,

concentration in the domestic CRBs industry by the subject

producers makes it unlikely that revocation of the antidumping duty

orders will result in adverse price effects.

C. The Commission’s Consideration of Relevant Record
Evidence

1. Contentions of the Parties

In its moving brief, Timken maintains that the Commission

failed to address critical evidence regarding inventory levels,

third country prices and likely dumping margins. See Timken’s Br.
Court No. 00-08-00385 Page 28

at 59. According to Timken, the ITC’s own report “showed U.S.

importers’ inventories of subject imports at substantial and rising

levels,” which supports a likely increased volume determination.

Id. at 61. Timken also argues that the data collected from foreign

producers’ inventories of CRBs also supports a similar volume

determination. See id. at 62. Therefore, Timken maintains that

the Commission’s failure to adequately address inventory levels

renders the Final Determination unsupported by substantial

evidence.

Timken raises a similar argument with respect to third country

prices and likely dumping margins. Although the ITC possessed

evidence that “prices in the United States were higher than in

third countries” and predictions by Commerce of high post-

revocation margins, the Commission failed to discuss these factors

in its pricing analysis. See id. at 65-66.

The ITC acknowledges that “existing inventories of subject

merchandise or likely increases in inventories are factors that the

Commission is to consider” in the pricing analysis of its sunset

review determination. Def.’s Opp’n at 29. Therefore, the ITC

collected information relating to both importers and foreign

producers’ inventories of subject CRBs. See id. According to the

ITC, this information painted a “mixed picture” that the Commission

could not reasonably rely on for its Final Determination. See id.
Court No. 00-08-00385 Page 29

at 30. The ITC notes, however, that it did consider such

inventories in its determination. See id. at 30-31. The ITC also

argues that although it collected and considered data relating to

dumping margins calculated by Commerce, the antidumping statute

does not obligate the Commission to do so. See id. at 31.

Moreover, the ITC argues that it is under no statutory directive to

consider pricing data of third countries, much less address such

evidence in its determination. See id. at 33.

NSK, NTN, SKF and FAG consider Timken’s arguments unconvincing

and argue that the ITC’s Final Determination should be upheld.

2. Analysis

“[T]he question of whether the ITC conduc[ted] a thorough . .

. 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 (citing Allentown Mack Sales & Serv., Inc. v. NLRB., 522 U.S.

359, 366-67 (1998)). Regardless of whether each piece of specific

evidence is discussed, “[t]he [Commission] is presumed to have

considered all the evidence in the record.” Dastech Int’l, Inc. v.

United States, 21 CIT 469, 475, 963 F. Supp. 1220, 1226 (1997); see

Roses, Inc. v. United States, 13 CIT 662, 668, 720 F. Supp. 180,
Court No. 00-08-00385 Page 30

185 (1989); Granges Metallverken AB v. United States, 13 CIT 471,

479, 716 F. Supp. 17, 24 (1989); National Ass’n of Mirror Mfrs. v.

United States, 12 CIT 771, 779, 696 F. Supp. 642, 648 (1988).

Moreover, “the fact that certain information is not discussed in a

Commission determination does not establish that the Commission

failed to consider that information because there is no statutory

requirement that the Commission respond to each piece of evidence

presented by the parties.” Granges, 13 CIT at 478-79, 716 F. Supp.

at 24 (citations omitted). Although the Commission did not

explicitly reference each piece of evidence it examined, the Court

is satisfied that it considered all the relevant data in rendering

the Final Determination.

In accordance with 19 U.S.C. § 1675a(2)(B), the Commission

“collected information relating to inventories of subject

merchandise, both with respect to inventories of importers and of

foreign producers.” Def.’s Opp’n at 29. However, the information

collected for domestic importers and foreign producers showed mixed

trends, which ultimately prompted the Commission to reject this

factor from its volume analysis. See id. at 30; see also Taiwan

Semiconductor Indus. Ass’n v. United States, 24 CIT 914, 928, 118

F. Supp. 2d 1250, 1262 (2000) (finding that the ITC has the

discretion to weigh evidence in an investigation and choose to

weigh some pieces of evidence differently than others). Similarly,
Court No. 00-08-00385 Page 31

the Commission collected and reviewed information relating to

sunset dumping margins determined by Commerce. Unlike an original

antidumping investigation, the Commission is not obligated to

consider such dumping margins in a sunset review determination.

See 19 U.S.C. § 1675a(a)(6) (stating that in making a sunset review

determination “the Commission may consider the magnitude of the

margin of dumping” (emphasis added)). Contra 19 U.S.C. §

1677(7)(C)(iii) (1994) (stating that the Commission shall evaluate

the magnitude of the dumping margin in an original investigation).

Moreover, the Commission is not obligated to collect or consider

pricing information in countries other than the United States. See

19 U.S.C. § 1675a(a)(2)-(3). Accordingly, the Court finds that

Timken’s argument that Commerce failed to address critical evidence

regarding inventory levels, third country prices and likely dumping

margins is without merit.

D. Likely Subject Import Analysis and the Business Cycle
Requirement

1. Contentions of the Parties

Timken argues that the Commission’s findings regarding

vulnerability of the domestic market and the likely continuation of

material injury in the event of revocation are not supported by

substantial evidence. See Timken’s Br. at 80. According to

Timken, the Commission failed to examine the relevant economic
Court No. 00-08-00385 Page 32

information in the context of the business cycle. Specifically,

Timken contends that “[n]either in its analysis of the impact of

revocation nor in its discussion of the prevailing conditions of

competition, does the Commission examine the relevant economic

evidence taking into account how this data may be affected by any

cyclical conditions in the industry.” Id. at 80. Timken

references the ITC’s analysis in Gray Portland Cement, USITC Pub.

3361, where the Commission specifically addressed such factors in

the context of the business cycle.

Timken argues that the ITC also failed to consider the

beneficial effects of the original antidumping duty orders on the

domestic industry. See Timken’s Br. at 75. Specifically, Timken

contends that “[i]n concluding that revocation would not lead to

recurrence of material injury, the Commission cited the ‘dramatic

improvement’ in the domestic industry since imposition of the order

and concluded that any increases in imports or adverse price

effects would not have a material impact on this ‘condition.’” Id.

at 76. Timken also attacks Commissioner Askey’s analysis and

maintains that her reasoning directly conflicts with Congressional

intent and is inconsistent with past precedent. See id. at 76-77.

The ITC contends that its likely subject import determination

is supported by substantial evidence and in accordance with law.
Court No. 00-08-00385 Page 33

In concluding that the cumulated subject imports would
not be likely to have a material impact on the domestic
industry if the antidumping orders on CRBs were revoked,
the Commission found that the industry was not vulnerable
to material injury. It contrasted the domestic
industry’s current expanded capacity, 80 percent capacity
utilization rates, and ‘very healthy’ operating ratios
with its ‘anemic’ condition at the time of the original
investigation. It observed that these improvements came
during a period when, notwithstanding the orders, both
subject imports and non[-]subject imports continued to
increase substantially both in total value and market
share.

Def.’s Opp’n at 34. Moreover, the ITC notes that it had previously

found “that revocation of the orders was not likely to result in

significant increases in import volumes or significant price

effects.” Id. Consequently, this determination led the Commission

to conclude that “any growth in subject import volumes would not be

likely to have a [significant] material impact on the domestic CRB

industry’s condition.” Id. Furthermore, the Commission found that

“projected growth in demand for CRBs would likely increase

opportunities for the domestic industry even if subject imports

were to increase modestly.” Id.

The ITC also argues that the Commission properly considered

whether improvement in the condition of the domestic industry was

attributable to the imposition of the antidumping duty orders. See

id. at 35. According to the Commission, the domestic industry was

significantly stronger during the POR in comparison to the time

period before the imposition of the orders. See id. The
Court No. 00-08-00385 Page 34

Commission found expanded capacity utilization rates, increased

ratios of operating income to net sales and a higher value of

United States shipments. See id. This information led the

Commission to conclude that “the [domestic] industry’s condition

was strong and that it was not vulnerable to material injury.” Id.

NSK, NTN, SKF and FAG generally argue that the ITC

sufficiently addressed whether improvements observed in the CRBs

industry were attributable to the antidumping duty orders and

properly evaluated all relevant economic factors within the context

of the business cycle. Accordingly, the subject producers argue

that the Commission’s Final Determination should be sustained.

2. Analysis

In five-year reviews, the antidumping statute directs Commerce

to revoke “an antidumping duty order or finding, . . . unless . .

. the Commission makes a determination that material injury would

be likely to continue or recur as described in [19 U.S.C. §

1675a(a)] . . . .” 19 U.S.C. § 1675(d)(2). To determine whether

revocation is likely to lead to the continuation or recurrence of

material injury, 19 U.S.C. § 1675a(a)(1)(B) and (C) instructs the

Commission to consider the current state of the domestic industry.

Moreover, the antidumping statute provides a list of relevant

economic factors that the Commission is to consider in determining

the likely impact of imports after revocation. The list includes,
Court No. 00-08-00385 Page 35

but is not limited to:

(A) likely declines in output, sales, market share,
profits, productivity, return on investments, and
utilization of capacity,

(B) likely negative effects on cash flow,
inventories, employment, wages, growth, ability to raise
capital, and investment, and

(C) likely negative effects on the existing
development and production efforts of the industry,
including efforts to develop a derivative or more
advanced version of the domestic like product.

19 U.S.C. § 1675a(a)(4). The statute also clarifies that “[t]he

Commission shall evaluate all relevant economic factors . . .

within the context of the business cycle and the conditions of

competition that are distinctive to the affected industry.” Id.

(emphasis added).

The Commission “shall [also] take into account . . . whether

any improvement in the state of the industry is related to the

[antidumping duty] order . . . .” 19 U.S.C. § 1675a(a)(1)(B).

Legislative history directs the Commission to

consider whether there has been any improvement in the
state of the domestic industry that is related to the
imposition of the order . . . . The Commission should
not determine that there is no likelihood of continuation
or recurrence of injury simply because the industry has
recovered after the imposition of an order . . . because
one would expect that the imposition of an order . . .
would have some beneficial effect on the industry.
Moreover, an improvement in the state of the industry
related to an order . . . may suggest that the state of
the industry is likely to deteriorate if the order is
revoked . . . .
Court No. 00-08-00385 Page 36

H.R. Doc. No. 103-465, at 884, reprinted in 1994 U.S.C.C.A.N. at

4210-11. Title 19 of the United States Code further provides:

The presence or absence of any factor which the
Commission is required to consider under [19 U.S.C. §
1675a(a)] shall not necessarily give decisive guidance
with respect to the Commission’s determination of whether
material injury is likely to continue or recur within a
reasonably foreseeable time if the order is revoked . .
. . In making that determination, the Commission shall
consider that the effects of revocation . . . may not be
imminent, but may manifest themselves only over a longer
period of time.

19 U.S.C. § 1675a(a)(5).

In making its Final Determination, the Commission considered

the dramatic increases in United States consumption of CRBs. See

Final Determination, USITC Pub. 3309 at 45. Specifically, the ITC

noted the substantial increase in the value of domestic shipments

by United States producers. See id. at 46. The Commission

reasoned that such increases were a result, in large part, to the

revitalization of the domestic automotive industry and the gradual

incline in air travel, which both resulted in a subsequent increase

in demand for CRBs. In making its Final Determination, the ITC

also considered the state of the domestic industry and noted

significant improvements in factors such as capacity, capacity

utilization, number of production workers and ratio of operating

income to net sales. See Final Determination, USITC Pub. at 50.

Specifically, in its likely subject imports analysis, the ITC

observed that
Court No. 00-08-00385 Page 37

[t]he years since the imposition of the orders have
brought a dramatic expansion of the industry overall.
Capacity [significantly ]expanded from . . . 1987 to . .
. 1998. The growth in capacity was spurred by investment
by both domestically owned and foreign-owned firms.
Capacity utilization, which was below 25 percent during
the period of the original investigation, was over 80
percent in 1997 and 1998. The number of production
workers rose from 1,900 in 1987 to 4,160 in 1998. The
ratio of operating income to net sales rose from 1.4
percent in 1987 to a very healthy 13.9 percent in 1998.
Domestic producers have even increased exports relative
to the period of the original investigations. By any
measure, the domestic CRB[s] industry is significantly
stronger now than it was during the period of the
original investigations and is not currently vulnerable
to material injury.

Id. (footnotes and confidential information omitted). In the same

analysis, the ITC noted that such “dramatic improvement in the

health of the domestic industry has occurred during a time when,

despite the orders, subject imports, as well as non[-]subject

imports, continued to increase substantially, both in total value

and in market share.” Id. The ITC argues that this analysis

adequately addresses whether improvements in the domestic CRBs

industry were attributable to the antidumping duty orders. The

Court disagrees. As noted by Timken, the Commission’s comparison

of industry indicators over the 1987-1998 period simply describes

the improvements in the domestic industry. See Timken’s Reply Br.

at 38. Therefore, the Court remands the Final Determination for

further explanation of whether any improvement in the state of the

domestic industry is related to the antidumping duty orders.
Court No. 00-08-00385 Page 38

The antidumping statute also directs that the Commission’s

findings must consider all relevant economic factors “within the

context of the business cycle and the conditions of competition

that are distinctive to the affected industry.” 19 U.S.C. §

1675a(a)(4) (emphasis added). The purpose of the business cycle

requirement is to allow the Commission to consider whether

different trends in the business cycle mask harm caused by unfair

trading practices. See S. Rep. No. 100-71, 100th Cong., 1st Sess.

115-30 (1987); Chr. Bjelland Seafoods A/S v. United States, 16 CIT

945, 955-56 (1992) (citations omitted). The ITC argues that the

Commission “devoted over two pages of . . . its opinion concerning

CRBs to a discussion of pertinent conditions of competition in that

industry,” and that Timken simply disagrees with the Commission’s

findings as to domestic demand and the condition of the domestic

industry. Def.’s Opp’n at 37. The Court, however, finds that the

Commission’s analysis fails to evaluate all of the relevant

economic factors within the context of the business cycle.

Accordingly, the Court remands the ITC’s Final Determination for

further explanation of the Commission’s findings in the context of

the appropriate business cycle.
Court No. 00-08-00385 Page 39

E. Commissioner Askey’s Separate Views Regarding Capacity
Utilization Rates

1. Contentions of the Parties

Timken argues that Commissioner Askey’s determination that

capacity utilization rates for Germany and Japan are high is

directly at odds with the record and, therefore, is unsupported by

the record.9 See Timken’s Br. at 85-88. Timken also raises issue

with Commissioner Askey’s finding that German and Japanese

utilization rates are at a level sufficient to permit high levels

of profitability. See id. at 87. Specifically, Timken contends

that Commissioner Askey fails to consistently apply a standard

capacity utilization rate threshold that would indicate a high

profitability level. See id.

The ITC argues that since the Commission did not consider

whether the capacity utilization rates were high in the original

investigation, Commissioner Askey was not obligated to consider

those rates as dispositive in the sunset review determination. See

Def.’s Opp’n at 40. According to the ITC, Timken’s “argument is

based on semantics rather than substance.” Id. The ITC considers

Commissioner Askey’s analysis accurate since the subject countries

all had capacity utilization rates either exceeding or relatively

9
Timken also points out that Commissioner Askey’s high
capacity utilization finding was inconsistent with Commissioners
Hillman and Koplan’s determination. See Timken’s Br. at 86 n.90.
Court No. 00-08-00385 Page 40

close to the threshold rate. See id. at 41. The ITC further

argues that even a finding that Commissioner Askey’s analysis of

capacity utilization is flawed and would not alone render the Final

Determination unsupported by substantial evidence. See id.

NSK, NTN, SKF and FAG generally agree that Timken’s argument

relating to Commissioner Askey’s capacity utilization finding

should be rejected in full. According to NSK, Commissioner Askey

did not rely solely on capacity utilization in determining that she

concurred with the majority as to revocation of the CRBs orders,

but rather, based her decision on a number of unrelated economic

factors. See NSK’s Resp. at 41-42.

2. Analysis

Commissioner Aksey clearly sets out each factor that she

considered in her finding that the likely volume of subject imports

would not be significant upon revocation of the antidumping duty

orders on CRBs. See Askey’s View, USITC Pub. 3309 at 149-53. Such

factors include the following: (1) antidumping duty orders had

little impact on the ability of the subject producers to ship

volumes to the United States, as shown by the increased volume and

market share of subject imports; (2) the subject producers operated

at relatively high capacity utilization rates; (3) subject

producer’s orientation towards their home markets made it unlikely

that they would increase shipments to the United States; (4)
Court No. 00-08-00385 Page 41

affiliations between subject producers and domestic producers acted

as disincentives to subject producers to increase exports to the

United States; (5) likely increases in demand mitigated the

significance of any increase in volume after revocation of the

orders; and (6) inventory levels of the subject producers were not

particularly high. See id. Although the Court agrees that it was

inaccurate for Commissioner Askey to generalize that all subject

producers operate at relatively high capacity utilization rates,

the Court finds that Commissioner Askey’s reasoning, on a whole,

substantiates her negative injury determination. Capacity

utilization rates amounted to only one factor that was considered

in her determination and, therefore, the Court finds that

Commissioner Askey’s volume of subject imports findings are

supported by substantial evidence.

F. Chairman Koplan’s Determination With Respect to CRBs from
France

1. Contentions of the Parties10

Timken argues that the ITC failed to apply adverse inferences

with respect to CRBs from France despite the fact that only one

foreign subject producer responded to the Commission’s requests for

data. See Timken’s Br. at 88. Timken claims that this approach is

contrary to that taken by Chairman Koplan in his analysis of

10
NSK, NTN and SKF do not address this issue.
Court No. 00-08-00385 Page 42

spherical plain bearings (“SPBs”). See id. at 88-89. Timken also

argues that Chairman Koplan “attempted to downplay the relevance of

the missing data by noting that the ‘vast majority of current

subject imports’ were from the other cumulated countries.” Id. at

91. In sum, Timken contends that the Final Determination should be

remanded with instructions that Chairman Koplan apply adverse

inferences with respect to missing production and capacity data.

See id. at 93.

The ITC asserts that Timken erroneously characterizes Chairman

Koplan’s methodology in its SPBs analysis. See Def.’s Opp’n at 41.

The ITC explains that unlike the CRBs analysis, Chairman Koplan did

not cumulate subject imports from France with subject imports from

Germany and Japan in his SPBs investigation. Therefore, when

determining the price effects and impact of subject imports from

France, Chairman Koplan based the Commission’s analysis on facts

available. See id. at 42. The ITC distinguishes that in the CRBs

investigation, the Commission (including Chairman Koplan) found

that data issues with respect to French producers were not as

important in the cumulated CRBs analysis. This led the Commission

to conclude that data collected from the remaining four subject

countries “accounted for the vast majority of current subject

imports, and that it was ‘not . . . likely that the missing data

on producers in France would lead [the Commission] to a different
Court No. 00-08-00385 Page 43

conclusion regarding cumulated subject imports.’” Id. (citing

Final Determination, USITC Pub. 3309 at 48 n.371).

FAG argues that the antidumping statute grants the Commission

the discretion to make adverse inferences. See FAG’s Resp. Br.

Opp’n Pl.’s R. 56.2 Mot. J. Agency R. at 15. FAG further argues

that the Commission’s determination in the SPBs investigation is

irrelevant. See id. at 16.

2. Analysis

Section 1677e of Title 19 of the United States Code states

that the Commission “may use an inference that is adverse to the

interests of [a] party” that “has failed to cooperate by not acting

to the best of its ability to comply with a request for

information.” 19 U.S.C. § 1677e(b) (1994). Neither the statute’s

plain language nor its legislative history obligates the Commission

to make adverse inferences in any situation. Rather, the ITC is

given the discretion to make such inferences. Furthermore, the

Commission is not required to make identical determinations in

every review (i.e., the Commission’s SPBs and CRBs investigations),

but rather must consider each subject import and the circumstances

of each investigation as sui generis. See Armstrong Bros. Tool Co.

v. United States, 84 Cust. Ct. 102, 115, 489 F. Supp. 269, 279

(1980); see also Citrosuco Paulista, S.A. v. United States, 12 CIT
Court No. 00-08-00385 Page 44

1196, 1209, 704 F. Supp. 1075, 1087 (1988). Therefore, even if the

Commission applied adverse inferences in its SPBs investigation,

the Commission was certainly not required to do the same in its

CRBs analysis.

The Court is satisfied with the Commission’s explanation of

why it chose not to make adverse inferences against CRBs producers

from France and finds that Chairman Koplan’s decision was in

accordance with law.

CONCLUSION

The Court remands the Final Determination to the ITC to: (a)

further explain any likely impact of CRBs imports from the subject

countries in the context of the entire United States CRBs industry;

(b) address whether any improvement in the state of the domestic

industry is related to the antidumping duty orders; and (c) further

explain the Commission’s findings in the context of the CRBs

business cycle.

/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: New York, New York
January 27, 2004