Consolidated Bearings Co. v. United States

Slip Op. 02-03

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
:
CONSOLIDATED BEARINGS COMPANY, :
:
Plaintiff, :
: Court No. 98-09-02799
v. :
:
THE UNITED STATES, :
:
Defendant. :
___________________________________:

ORDER

The case at bar comes before this Court as a result of the

Court’s decision in Consolidated Bearings Co. v. United States

(“Consolidated Bearings”), 25 CIT ___, 166 F. Supp. 2d 580 (2001),

and concerns the events that followed the issuance of Final Results

of Antidumping Duty Administrative Review of Antifriction Bearings

(Other Than Tapered Roller Bearings) and Parts Thereof From the

Federal Republic of Germany, 56 Fed. Reg. 31,692 (July 11, 1991),

as amended by Amended Final Results of Antidumping Duty

Administrative Reviews of Antifriction Bearings (Other Than Tapered

Roller Bearings) and Parts Thereof From Germany, 62 Fed. Reg.

32,755 (June 17, 1997), by the United States Department of

Commerce, International Trade Administration (“Commerce”).
Court No. 98-09-02799 Page 2

Specifically, on September 9, 1997, Commerce instructed the

United States Customs Service (“Customs”) to liquidate, at a

certain “manufacturer’s” rate, entries of the merchandise produced

by FAG Kugelfischer Georg Schaefer KGaA (“FAG Kugelfischer”) and

imported by certain importers, the list of which did not include

Consolidated Bearings Company (“Consolidated Bearings”), an entity

that imported the merchandise manufactured by FAG Kugelfischer as

well as other merchandise. Almost a year later, on August 4, 1998,

Commerce sent liquidation instructions (“Liquidation Instructions”)

to Customs requiring Customs to liquidate the merchandise that was:

(1) produced in Germany; (2) imported by any importer; and (3)

still remained unliquidated after the application of prior

liquidation instructions including that of September 9, 1997, at

the deposit rate required at the time of entry of the merchandise.

Under the Liquidation Instructions, Customs had to assess

Consolidated Bearings’ entries at the rate much higher than the

“manufacturer’s” rate determined by Commerce for FAG Kugelfischer.

Consequently, Consolidated Bearings moved pursuant to USCIT R.

56.1 for judgment upon the agency record challenging the

Liquidation Instructions issued by Commerce and alleging that the

Liquidation Instructions were arbitrary, capricious, an abuse of

discretion, or otherwise not in accordance with law. The Court

granted Consolidated Bearings’ motion and remanded this case to
Court No. 98-09-02799 Page 3

Commerce to: (a) annul the Liquidation Instructions issued by

Commerce on August 4, 1998; and (b) take further actions not

inconsistent with this opinion. See Consolidated Bearings, 25 CIT

at ___, 166 F. Supp. 2d at 593. The Court particularly explained

that the remand was caused by: (1) the insufficiency of Commerce’s

explanation about Commerce’s reasons for the issuance of the

Liquidation Instructions, see id. 25 CIT at ___, 166 F. Supp. 2d at

590-92; and (2) the deficiencies of the Liquidation Instructions

evincing Commerce’s acknowledgment that Consolidated Bearings’

imports of FAG Kugelfischer’s merchandise could have been

liquidated previously and legitimately under the rates given in the

instructions of September 9, 1997.

On November 6, 2001, Commerce filed Final Results of

Redetermination Pursuant to Ct. Remand (“Remand Results”) for

Consolidated Bearings, 25 CIT ___, 166 F. Supp. 2d 580. In the

Remand Results, Commerce explains that Commerce: (1) possesses no

information on whether Consolidated Bearings’ purchases of FAG

Kugelfischer’s merchandise were direct, see Remand Results at 3;

(2) “surmise[s] . . . that Consolidated [Bearings] purchased the

[merchandise] from an intermediate party,” id. at 4; (3) “find[s]

it inappropriate to instruct” Customs to liquidate Consolidated

Bearings’ merchandise at FAG Kugelfischer’s rates, id. at 5; and

(4) devises two alternative approaches (one of which provides for
Court No. 98-09-02799 Page 4

“three alternative rates” for different types of Consolidated

Bearings’ merchandise) to be used instead of the approach given in

the September 9, 1997, liquidation instructions because “the Court

did not specify any alternative rates [Commerce] should consider.”

Id. at 3, 6-8.

While the Court appreciates the care and consideration and

recognizes the creativity Commerce put into creation of alternative

approaches and alternative rates, it is obvious that Commerce

misreads the purpose and the scope of the remand.

The gist of Consolidated Bearings, 25 CIT ___, 166 F. Supp.

2d 580, is that, within parameters of each administrative

determination, Commerce is bound to each election Commerce makes.

Cf. SKF USA Inc. v. United States, 263 F.3d 1369, 1382 (Fed. Cir.

2001). If Commerce issues liquidation instructions that Commerce

contemplates to be applicable to a particular merchandise, Commerce

cannot change its mind and enter “corrections” a year later or, as

Consolidated Bearings correctly points out, three years later.

Accord Pl.’s Comments Concerning Final Results of Redetermination

Pursuant Ct. Remand at 3. If Commerce does not review a particular

respondent but knowingly allows the imports of such respondent to

be liquidated at a particular rate, Commerce is equally bound to

such election. In this case, Commerce is bound by the September
Court No. 98-09-02799 Page 5

9, 1997, liquidation instructions. If Commerce is unsatisfied with

a potential application of those instructions, Commerce should have

issued said instructions in a clearer manner. Indeed, it would be

anomalous to suggest that Commerce could “fine tune” its

determinations any time Commerce is displeased with the outcome of

the application of a document Commerce issued or any time Commerce

starts having doubts about the evidence Commerce possesses. Under

such a scheme the whole administrative process would not only lose

any time frame and due process constrains but would effectively

become a carte blanche in the hands of an agency.

The Court presumes that the reason for Commerce’s misreading

of the scope of the remand is the Court’s instruction to “take

further actions not inconsistent with [the Court’s] opinion.”

Consolidated Bearings, 25 CIT at ___, 166 F. Supp. 2d at 593. It

seems that Commerce read this language as a requirement to devise

alternative approaches (or rates) for Consolidated Bearings’ import

of FAG Kugelfischer’s merchandise. See Remand Results at 3, 6.

Commerce is in error. Under the language of the September 9,

1997, liquidation instructions and Commerce’s actions within a year

after the issuance of these instructions, all Consolidated

Bearings’ imports of FAG Kugelfischer’s merchandise during the

period of review should be liquidated in accordance with the
Court No. 98-09-02799 Page 6

September 9, 1997, liquidation instructions only. Courts omit

spelling out the particular technical actions to be taken by an

agency because courts are in privy with only a limited amount of

evidence and, thus, are unfamiliar with particularities of the

transactions under review.

For example, if the language of the September 9, 1997,

liquidation instructions allows: (1) different modes of

liquidation; and (2) such different modes were actually utilized by

Customs right after Customs’ receipt of the September 9, 1997,

liquidation instructions with regard to parties other than

Consolidated Bearings, Commerce could have instructed Customs to

choose among these modes of liquidation.1 Alternatively, because

“Consolidated[] [Bearings’] entries were not reviewed” during the

review at issue, and Commerce “do[es] not have any information

about the kinds of [merchandise] Consolidated [Bearings] entered

during the period,” Remand Results at 5, Commerce could instruct

Customs to liquidate Consolidated Bearings’ import of FAG

Kugelfischer’s merchandise in accordance with the September 9,

1
Indeed, such a supposition seems unlikely. Commerce,
however, stated that alternative readings of the September 9, 1997,
liquidation instructions were plausible. See Consolidated
Bearings, 25 CIT at ___, 166 F. Supp. 2d at 592. While the
possibility of alternative readings could serve as a basis for a
vagueness attack by Consolidated Bearings’, no such claim was
entered by the plaintiff.
Court No. 98-09-02799 Page 7

1997, liquidation instructions, while ordering the liquidation of

all other Consolidated Bearings’ merchandise under another

applicable determination which Commerce believes is applicable

(provided such other determination was duly rendered2 and it was

feasible for Commerce to devise a methodology of separating

Consolidated Bearings’ imports of FAG Kugelfischer’s merchandise

and other Consolidated Bearings’ imports during the period of

review). If in such a case, as unlikely as it may be, the identity

of the merchandise manufacturer would become an issue, the Court

could entertain Commerce’s reasonable methodology determining which

Consolidated Bearings’ imports are of FAG Kugelfischer’s

merchandise and which are not. Bearing in mind that it was

Commerce and not the Court that was charged with a duty to

familiarize itself with all the particular circumstances of the

transaction and apply the law, the Court issued Commerce a legal,

rather than technical, mandate in Consolidated Bearings, 25 CIT

___, 166 F. Supp. 2d 580.

However, because Commerce neither took nor suggested taking

any further actions with regard to Consolidated Bearings’ imports

of FAG Kugelfischer’s merchandise that would abide with Commerce’s

2
Any liquidation of Consolidated Bearings’ merchandise
without prior proper determination by Commerce would be a violation
of administrative process and Consolidated Bearings’ procedural due
process rights.
Court No. 99-08-00462 Page 8

September 9, 1997, liquidation instructions, it is hereby

ORDERED that the Remand Results filed by Commerce on November

6, 2001, are vacated; and it is further

ORDERED that this case is remanded to Commerce to liquidate

all Consolidated Bearings’ imports of FAG Kugelfischer’s

merchandise imported during the period of review in accordance with

the September 9, 1997, liquidation instructions; and it is further

ORDERED that the remand results are due within ninety (90)

days of the date that this order is entered. Any responses or

comments are due within thirty (30) days thereafter. Any rebuttal

comments are due within fifteen (15) days after the date the

responses or comments are due.

___________________________

NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: January 8, 2002
New York, New York