Slip Op. 03-141
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
LUOYANG BEARING FACTORY, :
:
Plaintiff and :
Defendant-Intervenor, :
:
v. : Consol. Court No.
: 99-12-00743
UNITED STATES, :
:
Defendant, :
:
and :
:
THE TIMKEN COMPANY, :
:
Defendant-Intervenor :
and Plaintiff. :
________________________________________:
[Commerce’s Remand Results II are affirmed. Case dismissed.]
Hume & Associates, PC (Robert T. Hume) for Luoyang, plaintiff
and defendant-intervenor.
Peter D. Keisler, Assistant Attorney General; David M. Cohen,
Director, and Jeanne E. Davidson, Deputy Director, Commercial
Litigation Branch, Civil Division, United States Department of
Justice (Ada E. Bosque); of counsel: Amanda L. Blaurock, Attorney,
Office of the Chief Counsel for Import Administration, United
States Department of Commerce, for the United States, defendant.
Stewart and Stewart (Terence P. Stewart and Wesley K. Caine)
for Timken, defendant-intervenor and plaintiff.
Dated: October 27, 2003
Consol. Court No. 99-12-00743 Page 2
OPINION
I. Standard of Review
The Court will uphold Commerce’s redetermination pursuant to
the Court’s remand unless it is “unsupported by substantial
evidence on the record, or otherwise not in accordance with law.”
19 U.S.C. § 1516a(b)(1)(B)(i) (1994). 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.”
Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting
Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
Substantial evidence “is something less than the weight of the
evidence, and the possibility of drawing two inconsistent
conclusions from the evidence does not prevent an administrative
agency’s finding from being supported by substantial evidence.”
Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966).
II. Background
On April 14, 2003, this Court issued an opinion and order
directing the United States Department of Commerce, International
Trade Administration (“Commerce”), to:
(a) point to specific evidence demonstrating that the type of
steel at issue (i.e., hot-rolled bearing quality steel
bar) purchased by the PRC trading company was subsidized;
and
(b) examine if, and only if, Commerce finds that the PRC
Consol. Court No. 99-12-00743 Page 3
trading company import prices do not constitute the “best
available information,” whether or not Indonesian data
(that is, Indonesian import statistics and export data
from Japan to Indonesia) constitute the “best available
information” over export data from Japan to India to
value the bearing quality steel bar used in the
production of TRB cups and cones.
Luoyang Bearing Factory v. United States (“Luoyang II”), 27 CIT
___, ___, 259 F. Supp. 2d 1357, 1366 (2003).1
On July 14, 2003, Commerce submitted its Final Results of
Redetermination Pursuant to Court Remand (“Remand Results II”). On
August 12, 2003, Luoyang submitted comments to this Court regarding
the Remand Results II. See Comments on Final Results Pursuant to
Remand (“Luoyang’s Comments”). Timken also submitted comments to
this Court on August 13, 2003. See Comments of Timken, Def.-
Intervenor, to Commerce’s Final Results of Remand Redetermination
(“Timken’s Comments”). Subsequently, on August 28, 2003, Luoyang
submitted rebuttal comments, which were followed by Timken’s
rebuttal comments on September 2, 2003. See Rebuttal Comments to
Def.-Intervenor’s Comments on Commerce’s Final Results of Remand
Determination (“Luoyang’s Rebuttal”) and Rebuttal Comments of
Timken, Def.-Intervenor, to Luoyang’s Comments on the Department of
Commerce’s Final Results of Remand Re-Determination (“Timken’s
1
The Court’s opinion and order in Luoyang II, 27 CIT ___, 259
F. Supp. 2d 1357, stems from the Court’s opinion and order in
Luoyang Bearing Factory v. United States (“Luoyang I”), 26 CIT ___,
240 F. Supp. 2d 1268 (2002), familiarity with which is presumed.
Consol. Court No. 99-12-00743 Page 4
Rebuttal”). Finally, on September 10, 2003, Commerce submitted its
response to Luoyang’s comments. See Def.’s Resp. to Luoyang’s
Comments to the Final Results of Redetermination Pursuant to Remand
(“Commerce’s Resp.”).
III. Contentions of the Parties
A. Luoyang’s Contentions
Luoyang argues that Commerce’s Remand Results II do not
satisfy the Court’s remand order. See Luoyang’s Comments at 2-15.
In particular, Luoyang contests: (1) Commerce’s subsidy suspicion
policy as an explanation offered by Commerce to disregard the PRC
trading company data to value either all of the subject merchandise
at issue or a portion of the subject merchandise purchased by
Luoyang through the trading company and used by Luoyang in the
manufacture of tapered roller bearing (“TRB”) cups and cones, see
id. at 3, 4-10; and (2) Commerce’s decision to use export data from
Japan to India to value TRB cups and cones. See id. at 10-14.
With respect to Commerce’s subsidy suspicion policy, Luoyang
asserts that since Commerce’s subsidy suspicion policy was never
raised in the Final Results of 1997-1998 Antidumping Duty
Administrative Review and Final Results of New Shipper Review of
Tapered Roller Bearings and Parts Thereof, Finished and Unfinished,
From the People’s Republic of China (“Final Results”), 64 Fed. Reg.
Consol. Court No. 99-12-00743 Page 5
61,837 (Nov. 15, 1999), the Court cannot consider Commerce’s
argument because it is not on the record. See Luoyang’s Comments
at 3, 4-5 (citing Hoogovens Staal BV v. United States, 22 CIT 139,
143, 4 F. Supp. 2d 1213, 1218 (1998).2 Luoyang further asserts
that “Luoyang was never given an opportunity to refute the subsidy
allegation.” Luoyang’s Comments at 5. Moreover, Luoyang maintains
that “Commerce provided no specific evidence of subsidies[,]”
Luoyang’s Comments at 6, and “Commerce failed to conduct any
investigation” regarding the subsidies.3 Id. at 7. Finally,
2
The Court in Luoyang II, 27 CIT at ___, 259 F. Supp. 2d at
1364, addressed an identical argument posed by Luoyang by stating
that “if Luoyang’s argument is taken to its logical conclusion, any
explanation offered by Commerce to comply with [the] Court’s
opinion and order . . . would be deemed a form of post
hoc rationalization.”
3
Citing to two countervailing duty determinations relied on
by Commerce to support Commerce’s reason to believe or suspect that
the steel purchased by Luoyang from the PRC trading company was
manufactured in a certain country whose steel was subsidized,
Luoyang argues that “Commerce did not review the [subsidy] programs
in detail and did not attempt to tie any specific [subsidy] program
to Luoyang’s steel producer.” Luoyang’s Comments at 6. Luoyang
then points to the fact that Commerce recently revised downward a
certain subsidy rate for a certain steel producer in the certain
country at issue for Luoyang’s proposition that “even a cursory
review of the evidence, without any investigation, establishes that
any benefit Luoyang’s steel producer could have received were no
more than de minimis.” Id. at 6-7. Moreover, to support its
position that Commerce failed to provide specific evidence of
subsidies and that Commerce failed to conduct any investigation
regarding the subsidies, Luoyang points to evidence provided in the
TRBs XIV administrative review. See Luoyang’s Comments at 7 n.14.
The Court will not entertain arguments posed by Luoyang
(continued...)
Consol. Court No. 99-12-00743 Page 6
Luoyang asserts that if the Court permits Commerce to apply its
subsidy suspicion policy, then: (1) “Commerce should also . . .
appl[y] the policy to the Indian import data used for the surrogate
scrap steel value[,]” Luoyang’s Comments at 8; (2) “the Court will
acknowledge that Commerce can adopt arguments not addressed during
the administrative proceeding[,]” id.; and (3) “Commerce’s NME
regulations will be changed [since] [n]early every country has
subsidy programs that are generally available and Commerce will be
prevented from using prices from those countries.” Id.; see also
id. at 8-10.
Next, Luoyang argues that “Commerce’s preference for a single
surrogate country should not trump the statutory requirement to use
the ‘best available information.’” Luoyang’s Comments at 10. In
particular, Luoyang argues that “the Japan to India values are not
the best available and do not reflect prices ‘in’ India.” Id. at
11. Luoyang maintains that Indonesian import data constitutes the
best available information for valuing the bearing quality steel
bar used in the production of TRB cups and cones. See id. at 12-
3
(...continued)
relating to an administrative record that is not before the Court.
See Hoogovens Staal BV v. United States, 24 CIT 242, 248, 93 F.
Supp. 2d 1303, 1308 (2000) (stating that “the records before
Commerce in subsequent review periods are not part of the record of
a prior review” and citing Hoogovens, 22 CIT at 144, 4 F. Supp. 2d
at 1218).
Consol. Court No. 99-12-00743 Page 7
13.4
B. Commerce’s Contentions
Commerce responds that pursuant to the Court’s opinion and
order in Luoyang II, 27 CIT at ___, 259 F. Supp. 2d at 1364-65,
Commerce “relied upon its own CVD findings to determine that there
was particular, specific, and objective evidence to uphold its
reason to believe or suspect that the price at issue was
subsidized.” Remand Results II at 5. Commerce maintains that
consistent with Congress’ instructions and absent the requirement
to conduct a formal investigation, the generally available
information revealed that export and industry-specific subsidies
were broadly available and “subsidies were utilized by the steel
industry and were countervailable.”5 Commerce’s Resp. at 4 (citing
4
Luoyang continues to argue as it did in Luoyang II, 27 CIT
at ___, 259 F. Supp. 2d at 1360 n. 4, that “Commerce failed to
disregard aberrational data” in the Remand Results II. Luoyang’s
Comments at 13. As the Court stated in Luoyang II, the Court will
not address this argument since it is outside the scope of this
remand redetermination and particularly since this Court in Luoyang
Bearing Factory, 26 CIT at ___, 240 F. Supp. 2d at 1285, held that
“the Court disagrees with Luoyang that the Court should order that
Commerce exclude the values for January 1998 and March 1998 from
the export data from Japan to India. Luoyang may not usurp
Commerce’s role as fact-finder and substitute Luoyang’s analysis
for the result reached by Commerce.”
5
Responding to Luoyang’s argument that a negative finding for
one steel supplier undermined Commerce’s subsidy suspicion policy
reasoning, Commerce explains:
(continued...)
Consol. Court No. 99-12-00743 Page 8
Remand Results II at 8). Commerce, therefore, asserts that
Commerce “possessed reason to believe or suspect that the market-
economy supplier, an exporter and member of a subsidized industry,
would . . . benefit from the subsidies and that . . . the prices of
the steel inputs obtained from the supplier would be distorted.”
Commerce’s Resp. at 4-5; see also id. at 7.
Commerce further explains that since Commerce found that the
PRC trading company import prices did not constitute the “best
available information,” Commerce, pursuant to the Court’s opinion
and order in Luoyang II, examined Indonesian data (that is,
Indonesian import statistics and export data from Japan to
Indonesia). Commerce maintains that although Commerce found export
data from Japan to India and export data from Japan to Indonesia to
be both acceptable values, Commerce, in its discretion elected to
use export data from Japan to India in order to value the subject
5
(...continued)
The negative determination referenced involved only one
large steel producer, while the two affirmative orders
demonstrate that other smaller steel companies from the
country in question had above de minimis subsidy levels.
[Commerce] find[s] the rates for the smaller steel
companies to be more predictive and representative of the
steel producers in the country in question. In light of
these affirmative determinations for other steel
producers, [Commerce’s] negative finding for the one
large company merely stands for the proposition that one
steel producer received de minimis subsidies.
Remand Results II at 18.
Consol. Court No. 99-12-00743 Page 9
merchandise at issue. See Commerce’s Resp. at 8-9 (citing
Tehnoimportexport, UCF America Inc. v. United States, 16 CIT 13,
18, 783 F. Supp. 1401, 1406 (1992)).
C. Timken’s Contentions
Timken generally agrees with Commerce and maintains that
Commerce complied with the Court’s remand instructions. See
Timken’s Comments at 1, 8, 9; see also Timken’s Rebuttal at 1-11.
IV. Analysis
The Court finds that Commerce complied with the Court’s
opinion and order in Luoyang II, 27 CIT ___, 259 F. Supp. 1357,
directing Commerce to point to specific evidence demonstrating that
the type of steel at issue (i.e., hot-rolled bearing quality steel
bar) purchased by the PRC trading company was subsidized. In
particular, in Remand Results II, Commerce found that:
the type of subsidies maintained by the government of the
country in question, and relied on in making [Commerce’s]
determination to reject the PRC trading company prices,
are not specific to any particular product or type of
steel. This is demonstrated by the CVD investigations
relied on by [Commerce] which show that the same subsidy
programs exist regardless of the type of steel products
being produced and exported. Furthermore, the export
subsidy programs maintained by the government in question
were offered to domestic companies engaged in foreign
trade. Enrollment in these export subsidy programs was
not based on the merchandise produced or a particular
industry but was only contingent on a company’s export
performance.
Consol. Court No. 99-12-00743 Page 10
Id. at 6 (emphasis added); see also Commerce’s Resp. at 3-5. Based
upon this information, Commerce established an adequate rebuttable
presumption that the steel at issue (i.e., hot-rolled bearing
quality steel bar) was subsidized. Specifically, since Commerce
had information that the subsidies were not specific to a
particular product or type of steel, Commerce made a logical
inference supported by substantial evidence that Commerce had
reason to believe or suspect that the steel purchased by the PRC
trading company was subsidized. It then became Luoyang’s burden to
overcome this presumption. Contrary to Luoyang’s assertion that it
was never given an opportunity to refute Commerce’s subsidy
allegation, Luoyang had the opportunity during Remand Results I and
Remand Results II, but failed to rebut Commerce’s presumption.
Next, the Court also finds that Commerce complied with the
Court’s opinion and order in Luoyang II, 27 CIT ___, 259 F. Supp.
1357, directing Commerce to examine whether or not Indonesian data
(that is, Indonesian import statistics and export data from Japan
to Indonesia) constitute the “best available information” over
export data from Japan to India to value the bearing quality steel
bar used in the production of TRB cups and cones only if Commerce
finds that the PRC trading company import prices do not constitute
the “best available information.” In Remand Results II, Commerce
stated:
Consol. Court No. 99-12-00743 Page 11
Consistent with the [Court’s] instructions . . .
[Commerce] ha[s] now analyzed the Indonesian import data
from HS category 7228.30 and [export data from Japan] to
Indonesia . . . from HS category 7228.30.900. Based on
this examination, [Commerce] find[s] the Indonesian HS
number, as with the Indian import HS number, to be a
basket category that encompasses a broad range of hot-
rolled bars and rods of alloy steel, in addition to the
bearing quality steel bars and rods used in TRB cup and
cone production. . . . As for the Japanese export
statistics, [Commerce] find[s] that they provide a
breakdown of the broad six-digit HS category 7228.30 into
several narrowly defined sub-categories. Although the
Japanese HS category 7228.30.900 (Bars and Rods, of Other
Alloy Steel) does not specifically isolate bearing
quality steel as does the [United States] HTS category
7228.30.20, this Japanese category would include the type
of bearing quality steel bar that is used to manufacture
the TRB cup and cone. Therefore, [Commerce] find[s] the
Indonesian import data, as a basket HS category, to be
less reliable in comparison to the more narrowly defined
Japanese export data (HS number 7228.30.900). . . .
In comparing the [export data from Japan] to
Indonesia . . . to the [United States] benchmark range
($642/MT to $834/MT), [Commerce] find[s] that the average
[export data from Japan to Indonesia] value, $702/MT,
provides a reasonable measure for this input. Because
the Japanese tariff category is the narrowest category
which could contain bearing quality steel, and because it
is consistent with values contained in [Commerce’s]
[United States] benchmark category, [Commerce] believe[s]
that these data are reliable for valuing steel used in
the production of cups and cones.
Therefore, the record of the underlying proceeding
contains two acceptable values for bearing quality steel,
[export data from Japan] to India and [export data from
Japan] to Indonesia. Moreover, the two values are
equally good in terms of their contemporaneity with the
[period of review], the fact that they are both based on
public information, and they are exclusive of duties and
taxes. . . . Therefore, relying upon [Commerce’s]
preference for valuing factors in a single country (19
CFR § 351.408(c)(2) [1998]), [Commerce] determine[s] that
the best information available for valuing bearing
Consol. Court No. 99-12-00743 Page 12
quality steel is [export data from Japan to India].
Remand Results II at 14-16 (citations omitted).
The Court further finds that contrary to Luoyang’s argument
that Indonesian import data constitutes the best available
information for valuing the bearing quality steel bar used in the
production of TRB cups and cones, see Luoyang’s Comments at 12-13,
Luoyang may not usurp Commerce’s role as fact finder and substitute
their analysis of the data for the result reached by Commerce.
Moreover, the Court finds that Commerce’s decision to choose export
data from Japan to India over export data from Japan to Indonesia
was reasonable. See Tehnoimportexport, 16 CIT at 18, 783 F. Supp.
at 1406 (“When Commerce is faced with the decision to choose
between two reasonable alternatives and one alternative is favored
over the other in their eyes, then they have the discretion to
choose accordingly.”).
Based on the foregoing and upon reviewing the parties’
submissions, the Court finds that Commerce complied with the
Court’s opinion and order in Luoyang II, 27 CIT ___, 259 F. Supp.
2d 1357.
Consol. Court No. 99-12-00743 Page 13
V. Conclusion
The Court affirms Commerce’s Remand Results II. This case is
dismissed.
______________________________
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: October 27, 2003
New York, New York