Torrington Co. v. United States , 25 Ct. Int'l Trade 1272 ( 2001 )

Slip Op. 01-135
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
_______________________________________
:
THE TORRINGTON COMPANY, :
:
Plaintiff and :
Defendant-Intervenor, :
:
v. :
:
UNITED STATES, :
:
Defendant, : Consol.
: Court No.
and : 99-08-00462
:
KOYO SEIKO CO., LTD. and :
KOYO CORPORATION OF U.S.A.; :
NTN CORPORATION, NTN BEARING :
CORPORATION OF AMERICA, AMERICAN :
NTN BEARING MANUFACTURING :
CORPORATION, NTN DRIVESHAFT, INC., :
NTN-BOWER CORPORATION and NTN-BCA :
CORPORATION, :
:
Defendant-Intervenors :
and Plaintiffs. :
_______________________________________ :
ORDER
This Court has received and reviewed the United States
Department of Commerce, International Trade Administration’s
(“Commerce”) Final Results of Redetermination Pursuant to Court
Remand (“Remand Results”) for Torrington Co. v. United States
(“Torrington”), 25 CIT ___, 146 F. Supp. 2d 845 (2001). In
Torrington, this Court: (a) denied in part and granted in part
Consol. Court No. 99-08-00462 Page 2
USCIT R. 56.2 motions by Koyo Seiko Co., Ltd. and Koyo Corporation
of U.S.A. (collectively “Koyo”) and NTN Corporation, NTN Bearing
Corporation of America, American NTN Bearing Manufacturing
Corporation, NTN Driveshaft, Inc., NTN-Bower Corporation and NTN-
BCA Corporation (collectively “NTN”) and denied USCIT R. 56.2
motion by The Torrington Company (“Torrington”); and (b) remanded
this case to Commerce to: (1) annul all findings and conclusions
made pursuant to the duty absorption inquiry conducted for this
review, Torrington, 25 CIT at ___, 146 F. Supp. 2d at 858; (2)
articulate what methodology Commerce used in conducting the arm’s
length test, id., 25 CIT at ___, 146 F. Supp. 2d at 871; (3)
clarify what action Commerce took with respect to inputs that NTN
obtained from affiliated parties, id., 25 CIT at ___, 146 F. Supp.
2d at 869; and (4) explain Commerce’s decision concerning NTN’s
packing expenses. Id., 25 CIT at ___, 146 F. Supp. 2d at 885.
With respect to the fourth issue, this Court specifically explained
that
[d]uring the prior reviews, Commerce re-allocated NTN’s
packing expenses. During the review in issue, however,
Commerce examined and denied NTN’s packing expenses.
Commerce found NTN’s allocation of home market packing
expenses distortive because NTN’s allocation allegedly
did not take into account the differences in packing to
different customers. Additionally, Commerce disallowed
the claimed adjustment for home market packing expenses
because NTN allegedly did not revise its methodology when
Commerce requested such a revision. Issuing its final
determination, Commerce stated that Commerce applied
partial adverse facts available, and yet Commerce also
Consol. Court No. 99-08-00462 Page 3
stated that Commerce denied the adjustment. NTN contends
that Commerce’s treatment of NTN’s home market packing
expenses, specifically: (1) Commerce’s denial of packing
expenses; and (2) Commerce’s application of facts
available and adverse inference to NTN’s home market
packing expense, was not in accordance with the law.
Because Commerce’s explanation of the action which it
took is not clear, the Court remands [both parts of the]
issue to Commerce for explanation of its final decision
concerning NTN’s packing expenses.
Id. (internal citations omitted, emphasis supplied).
Commerce complied with the Court’s remand with respect to the
first three issues. See Remand Results at 2-7. Furthermore,
addressing the fourth issue in the Remand Results, Commerce agreed
that “[Commerce’s] statement that [Commerce] applied partial
adverse facts available with regard to home-market packing expenses
was in error.” Commerce restated that, in fact, Commerce “denied
the expense in its entirety because [Commerce] found that NTN’s
allocation methodology was distortive . . . .” Remand Results at
7. Commerce, therefore, clarified its position only with respect
to the first prong of the fourth issue, that is, incoherence of
Commerce’s statements, while failing to address the second prong,
that is, the reasons for Commerce’s denial of NTN’s packing
expenses.
Consequently, in its response to the Remand Results, NTN
acknowledges that Commerce “denied NTN any adjustment for packing
expenses in the home market[] because [Commerce] was dissatisfied
Consol. Court No. 99-08-00462 Page 4
with NTN’s [reporting] methodology.” NTN’s Resp. ITA’s Letter of
Aug. 9, 2001, at 2. NTN, however, contends that Commerce could
have “reallocated the expense as [Commerce] did in subsequent
reviews.” Id. Thus, NTN’s contention effectively parallels the
Court’s request to Commerce to explain why “Commerce’s application
of facts available and adverse inference to NTN’s home market
packing expense[] was not in accordance with the law.” Torrington,
25 CIT at ___, 146 F. Supp. 2d at 885. While the Court does not
necessarily agree with NTN that Commerce erred in Commerce’s
decision not to reallocate the expense in the fashion utilized by
Commerce in other reviews, the Court holds that Commerce failed to
address the particular issue in the Remand Results.
Indeed, a substantial deficiency in NTN’s reported data allows
Commerce to deny an adjustment. Commerce’s power, however, is not
unconditional or free of exceptions. It may be that Commerce can
justify its refusal to reallocate the expense at issue as Commerce
did in other reviews, but it may be that Commerce cannot do so.
The only explanation provided by Commerce so far was the
statement that “Commerce[:] (1) found NTN’s allocation of home
market packing expenses distortive because [NTN] did not take into
account the differences in packing to different customers; and (2)
disallowed the claimed adjustment . . . because NTN did not revise
[NTN’s] methodology when Commerce requested such revision.” Def.’s
Court No. 99-08-00462 Page 5
Mem. Partial Opp’n Plts.’ Mot. J. Agency R. at 90. This
explanation is insufficient because it is silent on the following
issues: (1) why Commerce could not reallocate the expenses; (2) how
distortive was the data supplied by NTN; (3) whether the revisions
to NTN’s methodology requested by Commerce were given to NTN in a
timely manner, that is, so NTN could comply with the request; and
(4) whether the adjustment to NTN’s methodology required by
Commerce was reasonable and feasible to NTN. If the Court is to
play its statutorily required role in reviewing Commerce's
determination, it is important that the Court has clear guidance
from Commerce as to what was actually happening.
Therefore, this case having been duly responded and commented
to, and the Court, after due deliberation, having rendered a
decision herein; now, in accordance with said decision, it is
hereby
ORDERED that this case is remanded to Commerce so Commerce
would clarify its final decision concerning its denial of NTN’s
packing expenses ; 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
Court No. 99-08-00462 Page 6
responses or comments are due.
______________________
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: November 26, 2001
New York, New York