Timken Co. v. United States , 2004 CIT 17 ( 2004 )

Slip Op. 04-17
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
:
THE TIMKEN COMPANY, :
:
Plaintiff, :
:
v. :
:
UNITED STATES, :
:
Defendant, :
: Court No.
and : 00-08-00386
:
NSK LTD. and NSK CORPORATION; :
NTN BEARING CORPORATION OF :
AMERICA, NTN BOWER CORPORATION, :
AMERICAN NTN BEARING MANUFACTURING :
CORPORATION and NTN CORPORATION; :
KOYO SEIKO CO., LTD. and KOYO :
CORPORATION OF U.S.A., :
:
Defendant-Intervenors. :
___________________________________:
[The United States International Trade Commission’s Remand
Determination is affirmed. Case dismissed.]
Stewart and Stewart (Terence P. Stewart and William A.
Fennell) for The Timken Company, plaintiff.
Lyn M. Schlitt, General Counsel, Office of the General
Counsel, United States International Trade Commission (Mary Jane
Alves and Andrea C. Casson) for the United States, defendant.
Crowell & Moring LLP (Robert A. Lipstein, Matthew P. Jaffe and
Grace W. Lawson) for NSK Ltd. and NSK Corporation, defendant-
intervenors.
Barnes, Richardson & Colburn (Donald J. Unger, Kazumune V.
Kano and David G. Forgue) for NTN Bearing Corporation of America,
NTN Bower Corporation, American NTN Bearing Manufacturing
Corporation and NTN Corporation, defendant-intervenors.
Court No. 00-08-00386 Page 2
Sidley Austin Brown & Wood LLP (Neil R. Ellis and Neil C.
Pratt) for Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.,
defendant-intervenors.
Dated: February 25, 2004
OPINION
I. Standard of Review
The Court will uphold the United StatesInternational Trade
Commission’s (“ITC” or “Commission”) redetermination pursuant to
the Court’s remand unless it is “unsupported by substantial
evidence on the record, or otherwise not in accordance with law.”
19 U.S.C. § 1516a(b)(1)(B)(i) (1994). Substantial evidence is
“more than a mere scintilla. It means such relevant evidence as a
reasonable mind might accpet as adequate to support a conclusion.”
Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting
Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).
Substantial evidence “is something less than the weight of the
evidence, and the possibility of drawing two inconsistent
conclusions from the [same] evidence does not prevent an
administrative agency’s finding from being supported by substantial
evidence.” Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 620 (1966).
II. Background
On April 24, 2003, this Court issued an order directing the
Commission to
Court No. 00-08-00386 Page 3
(a) explain the likely impact of TRB imports from Japan
on the entire United States TRB industry; (b) further
investigate and explain the basis that Japanese TRB
producers used to report their capacity to produce TRBs
to the Commission; and (c) further explain the
Commission’s findings in the context of the TRB business
cycle.
Timken Co. v. United States, 27 CIT __, __, 264 F. Supp. 2d 1264,
1285 (2003). On July 23, 2003, the ITC submitted its Remand
Determination. On August 22, 2003, NSK Ltd. and NSK Corporation
(collectively, “NSK”) filed comments with this Court in support of
the ITC’s remand determination. On September 2, 2003, The Timken
Company (“Timken”) filed comments regarding the Remand
Determination. Subsequently, on September 8, 2003, NTN
Corporation, NTN Bearing Corporation of America, American NTN
Bearing Manufacturing Corporation and NTN Bower Corporation
(collectively, “NTN”), Koyo Seiko Co., Ltd. and Koyo Corporation of
U.S.A. (collectively, “Koyo”), and NSK filed their respective
comments to Timken’s comments on the Remand Determination. The ITC
filed a response to Timken’s comments on September 15, 2003.
DISCUSSION
I. The ITC’s Findings Regarding Reported Capacity Information
A. Contentions of the Parties
1. Timken’s Contentions
Timken complains that the Commission erroneously determined
that Japanese producers lacked the capacity to increase exports to
Court No. 00-08-00386 Page 4
the United States. See Timken’s Comments Remand Determination
(“Timken’s Comments”) at 1-7. Timken asserts that the ITC “has
continued to base its volume holding on its finding that the
Japanese producers ‘were operating at extremely high capacity
utilization (95.5 percent in 1998).’” Id. at 2 (quoting Remand
Determination at 6). Timken maintains that the Commission wrongly
relied “solely on the capacity figures reported by the Japanese
producers for its volume determination.” Id. at 5. Timken asserts
that the capacity utilization data reported by the Japanese
producers is not accurate. See id. at 3-5 (citing proprietary
material). Moreover, Timken takes issue with the definition of
capacity that the ITC used to determine capacity utilization rates.
See id. at 4-5. Consequently, Timken deduces that the ITC failed
to measure actual capacity. See id. (citing proprietary material).
Timken also argues that the data the ITC relied upon is different
from the data provided by Timken from World Bearing Statistics.
See id. at 6. Finally, Timken complains that the methodology used
by the Commission led to an inaccurate volume determination. See
id. at 6-7 (citing proprietary material).
2. ITC’s Contentions
The Commission responds that it complied with the remand
instructions and reopened the agency record to investigate the
basis on which the Japanese tapered roller bearing (“TRB”)
Court No. 00-08-00386 Page 5
producers used to report their capacity to produce TRBs. Rebuttal
Comments of Def. ITC Regarding July 23, 2003, Five-Year Review
Remand Determination Concerning TRBs Japan (“ITC’s Comments”) at 2-
15. The Commission asserts that “Timken’s arguments have now
morphed into a disagreement about how the questionnaire responses
were tabulated and about the conclusions the Commission drew from
them.” Id. at 4. The ITC refutes Timken’s suggestion that there
is “mathematical error” in its computations “because the quantities
in the worksheets match the quantities reported in the
questionnaire responses, the addition in the worksheets is
verifiable by a hand calculator, and the results in the worksheets
match the information reported in the summary table and in turn
cited in the Commission’s determinations.” Id. at 5. In addition,
the ITC asserts that it applied its established methodology to
determine capacity utilization for foreign producers and the
domestic industry. See id.
The Commission further asserts that it complied with the
statutory requirements set forth in 19 U.S.C. § 1675a(a)(2)(A) by
recognizing that, “during the period of review the Japanese
industry as a whole operated at high capacity utilization rates
that exceeded 100 percent . . . .” Id. at 6. The Commission
maintains that it considered the likelihood of increased production
or existing unused production capacity in Japan. See id. The ITC
Court No. 00-08-00386 Page 6
further asserts that the Japanese producers provided additional
information, which was reconfirmed and recertified during the
remand proceedings, regarding the data previously reported in the
five-year review. See id. at 7-8. The ITC states that: “the fact
that individual Japanese producers may have been able to produce at
levels greater (or lower) than their reported average production
capacity such that their capacity utilization levels were greater
(or lower) than one hundred percent does not detract from the
reliability of the reported capacity information.” Id. at 8. The
ITC maintains that it “explicitly referenced and distinguished
information reported in specific questionnaire responses and
observed that ‘in general’ the average production capacity and
production information reported by Japanese producers” was based on
certain operating parameters. Id. at 6 (quoting proprietary
material).
3. NSK, Koyo, and NTN’s Contentions
NSK, Koyo and NTN generally agree with the ITC’s finding that
Japanese producers had high capacity utilization rates during the
period of review (“POR”). NSK’s Comments Supp. ITC’s Remand
Determination (NSK’s Comments”) at 1-3; Rebuttal Comments Def.-Int.
Koyo Timken’s Comments Remand Determination ITC (“Koyo’s Comments”)
at 2-6; NTN’s Rebuttal Comments Remand Determination (“NTN’s
Comments”) at 2-6. NSK points out that during the sunset review,
Court No. 00-08-00386 Page 7
the Commission “calculated an ‘actual’ capacity figure . . . while
the [World Bearing Statistics] calculated a ‘theoretical’ capacity
figure.” NSK’s Comments at 2-3. Consequently, NSK maintains that
the “two databases should not be confused [or compared] with one
another.” Id. at 3.
Koyo maintains that the definition of production capacity
proposed by Timken “is not based on the normal measure of capacity
used in the industry, but rather an ill-defined notion of maximum
theoretical capacity.” Koyo’s Comments at 3. The Commission
sought a realistic estimate of production capacity under normal
operating conditions and not a theoretical measure. See id. at 4.
Consequently, Koyo argues that “Timken’s reliance on a theoretical
notion of maximum production capacity is not a sufficient basis for
this Court to reject the Commission’s reliance on the capacity
utilization figures reported by the Japanese respondents . . . .”
Id.
Koyo further points out that Timken’s argument regarding the
use of data collected by the Japan Bearing Industrial Association
(“JBIA”) “ignores the numerous differences and shortcomings of the
JBIA data, which were spelled out by the Japanese respondents and
the Commission during this remand proceeding.” Id. at 5.
According to Koyo, “Timken’s argument is really nothing more than
a complaint about the manner in which the Commission weighed the
Court No. 00-08-00386 Page 8
evidence Timken submitted against the capacity utilization data
submitted by the Japanese respondents.” Id. at 6.
NTN adds that “Timken’s ability to show that there was data on
the record different from the data relied upon by the ITC is
insufficient to overturn the ITC’s decision.” NTN’s Comments at 2.
NTN asserts that the ITC reasonably concluded that its “own
certified, verifiable questionnaire responses were more likely to
reflect accurate data than were the JBIA’s reported figures.” Id.
at 4. NTN maintains that it is within the Commission’s discretion
to make decisions regarding the evidence before it and that “the
ITC made a reasoned decision based on that substantial record
evidence to accept the capacity utilization data reported by the
Japanese producers in their ITC questionnaire responses.” Id. at
6.
B. Analysis
The Court found that, during its sunset review, “the
Commission erred by not inquiring into the basis used by Japanese
TRB producers to report their capacity.” Timken, 27 CIT at ___,
264 F. Supp. 2d at 1280. The Commission issued remand
questionnaires to Japanese TRB producers requesting such producers
to “(1) review the average production capacity and production
information . . . and to report the number of shifts per day, the
number of days per week, and the number of weeks per year that were
Court No. 00-08-00386 Page 9
the basis for that information for the reported periods; [and] (2)
identify and quantify any idled equipment that was available to
produce TRBs in their Japanese facilities [for the POR].” Remand
Determination at 3-4. Based on the information collected from the
remand questionnaires, the ITC found “that Japanese producers had
extremely high capacity utilization rates during the period
examined in the five-year review.” Id. at 4. The Court does not
agree with Timken that the Commission’s volume determination is
unsupported by substantial evidence.
Timken argues that the definition of average production
capacity used by the ITC does not take into account any idle
equipment or the number of shifts used to determine production
capacity. See Timken’s Comments at 4-5. Accordingly, Timken
asserts that the faulty definition prevented the ITC from
accurately measuring the average production capacity for Japanese
producers. See id. Timken essentially requests the Court to
substitute the Commission’s understanding of capacity utilization
rates for Timken’s notion of such rates. In light of the record
evidence, the Court holds that the ITC was reasonable in
determining “that Japanese producers had extremely high capacity
utilization rates during the period examined in the five-year
review.” Remand Determination at 4. As the Court has previously
stated, “the question of whether the ITC conduc[ted] a thorough .
Court No. 00-08-00386 Page 10
. . investigation begins with the substantial evidence test, and
the question of whether, in light of the record evidence as a
whole, ‘it would have been possible . . .’” for the Commission to
have reasonably reached its final determination. Acciai Speciali
Terni S.p.A. v. United States, 24 CIT 1064, 1074, 118 F. Supp. 2d
1298, 1307 (2000) (quoting Allentown Mack Sales & Serv., Inc. v.
NLRB, 522 U.S. 359, 366-67 (1998)). In the case at bar, the
Commission gathered necessary information that considered whether
equipment remained idle and the number of shifts reported by the
Japanese producers. Moreover, Timken did not produce any evidence
to prove such information unreliable.
Timken contends that the Commission’s measure of capacity is
unsupported by the evidence because the basis for such measurement
was the capacity data reported by the Japanese producers. Timken’s
Comments at 3-4. The Commission asked the Japanese producers to
report:
The level of production that [they] could reasonably have
expected to attain during the specified period. Assume
normal operating conditions (i.e., using equipment and
machinery in place and ready to operate; normal operating
levels (hours per week/weeks per year) and time for
downtime, maintenance, repair, and cleanup; and a typical
or representative product mix).
Remand Determination at 3. Timken argues that it has presented
certain record evidence which demonstrates that this definition
does not accurately reflect the production capacity of Japanese
Court No. 00-08-00386 Page 11
producers. See Timken’s Comments at 4-5. The Court, however, does
not agree with Timken. The Court will not overturn the ITC’s
determination “merely because the plaintiff ‘is able to produce
evidence . . . in support of its own contentions and in opposition
to the evidence supporting the agency’s determination.’”
Torrington Co. v. United States, 14 CIT 507, 514, 745 F. Supp. 718,
723 (1990) (internal citations omitted), aff’d, 938 F.2d 1276 (Fed.
Cir. 1991). The Commission reasonably relied on the information
submitted by Japanese producers as well as their reconciliation of
such information with secondary information submitted by Timken.
The ITC recognized that Japanese producers’ capacity utilization
rates ranged from 95.5 to 104.2 percent. Remand Determination at
2. Furthermore, the ITC took into account the reported information
prior to making its determination. Accordingly, the Court will not
substitute the Commission’s determination based on record data with
Timken’s interpretation of such data.
The Court finds that the ITC reasonably determined that the
information received from the remand questionnaires was “the most
probative and reliable data.” Id. at 5. The Commission did not
take the Japanese producers’ responses at face value, but rather it
“required questionnaire respondents to certify the accuracy of
Court No. 00-08-00386 Page 12
their reported information.”1 Id. The ITC reasonably deduced that
the data submitted by Japanese respondents is more probative
because “the data submitted to the JBIA carry no certification
obligation, are not subject to verification or review by
independent entities, may be revised and adjusted, and are not
subject to the same rigors as information used in investigations
such as the Commission’s.” Id. at 6. The Commission determines
how to gather information and Timken has the burden of
demonstrating that the ITC’s methodology is contrary to law.
Torrington, 14 CIT at 514, 745 F. Supp. at 723. Here, Timken has
failed to meet this burden. Accordingly, the Court holds that the
ITC adequately investigated and explained the basis that Japanese
producers used to report their capacity to produce TRBs.
II. The ITC’s Likely Volume Determination with Respect to the
Domestic Industry as a Whole
A. Contentions of the Parties
1. Timken’s Contentions
Timken complains that the Commission erroneously concluded
that Japanese producers would not compete for the United States
market share because it would harm their United States affiliates.
See Timken’s Comments at 15-21. Timken asserts that the ITC,
1
It should be further noted that the responses were
subject to verification by the ITC and by people with access to the
data under a protective order. See Remand Determination at 5.
Court No. 00-08-00386 Page 13
conscious of this Court’s instructions, “chose on remand to
characterize its original finding that relationships with [United
States] affiliates would limit the volume of subject imports from
Japan as ‘an additional factor’ that would limit imports.” Id. at
16. Timken argues that the ITC minimized its previous finding
regarding the effect Japanese affiliates in the United States would
have on imports. See id. Timken maintains, however, that record
evidence indicates that each Japanese producer would be able to
compete for sales without affecting their United States affiliates’
sales. See id. at 17. Timken states that it submitted affidavits
from its sales associates showing that it often competes with the
Japanese TRB producers for certain accounts. See id. at 18.
Timken deduces that “a Japanese producer selling a [United States]-
made part to a customer that sources other part numbers from Timken
can import those other part numbers to compete with Timken without
interfering with its sales of [United States]-made products.”2 Id.
Finally, Timken complains that “the testimony of counsel for a
Japanese producer, the history of this finding and order, the
testimony of Timken’s salesmen, and the opinions of two
2
Timken seems to argue that the ITC should not revoke the
antidumping duty order because its profits margin may be harmed by
increased competition. The purpose of the antidumping duty
statute, however, is to protect United States industries not
specific corporations from unfair behavior by foreign competitors.
In the instant case, Japanese companies have established United
States affiliates to compete with United States corporations.
Court No. 00-08-00386 Page 14
Commissioners all support the proposition that Japanese producers
could increase imports without affecting their [United States]
production facilities.” Id. at 20.
2. ITC’s Contentions
The Commission responds that its analysis of the likely
subject import volume is consistent with the statutory requirements
of 19 U.S.C. § 1675a(a)(2). See ITC’s Comments at 10. The ITC
maintains that its likely subject import volume determination is
premised on several factors: (a) “the declining volume of subject
imports from Japan both absolutely and relative to production and
consumption in the United States since the imposition of the 1987
antidumping order;” (b) increased investment in United States
production facilities by Japanese producers; (c) the high capacity
utilization rates of Japanese producers; (d) “Japanese producers’
orientation toward home and third-country markets and the absence
of import barriers to Japanese TRB shipments to third countries;
[(e)] low Japanese inventory to shipment ratios”; and (f) the
expense and difficulty of product shifting. Id. at 11.
Consequently, the ITC states that its analysis, contrary to
Timken’s assertions, “was not limited to its findings concerning
Japanese producers’ capacity and capacity utilization levels.” Id.
The ITC asserts that Timken “misrepresents the weight accorded
Japanese producers’ capacity and capacity utilization information
Court No. 00-08-00386 Page 15
in both the original review determination and the remand
determination.” Id. at 9.
Furthermore, the Commission argues that it properly considered
the entire domestic industry in concluding that the volume of
subject imports would likely be small and “would not be likely to
suppress or depress domestic prices to a significant degree, and
was not likely to cause material injury to the domestic industry as
a whole . . . .” Id. at 15. The Commission takes issue with
Timken’s assertion that the volume of subject imports from Japan
could increase and affect the United States market without
competing with the products made by the Japanese producers’
domestic affiliates. The ITC maintains that this argument is
flawed because it relies on the assumption that likely volume of
subject imports from Japan would be significant upon revocation of
the order. See id. at 13. The Commission asserts that the record
evidence supports the opposite conclusion. See id. Japanese
producers’ extremely high capacity utilization levels and their
significant commitments to customers in their home and third
country markets support the ITC’s finding that the likely volume of
subject imports from Japan was not likely to be significant. See
id. at 13-14. The Commission found that “even if all available
Japanese production capacity were used to produce TRBs for the
[United States] market,” such capacity level was small. Id. at 13.
Court No. 00-08-00386 Page 16
3. NSK, Koyo, and NTN’s Contentions
NSK, Koyo and NTN agree that the ITC properly found that
imports of the subject merchandise were not likely to be
significant if the order is revoked. See NSK’s Comments Opp’n
Timken’s Comments Remand Determination (“NSK’s Opp’n Comments”) at
8-9; Koyo’s Comments 9-11; NTN’s Comments 9-11. NSK asserts that
the ITC correctly found that the relationship between Japanese
producers and their United States affiliates is a factor “that
would likely limit the volume of subject imports from Japan as
regards sales by the [United States] affiliates.” NSK’s Opp’n
Comments at 8. Defendant-intervenors maintain that the Commission
reviewed other record evidence from which it concluded that volume
of subject imports from Japan would not be significant. See id. at
8-9; Koyo’s Comments at 9; NTN’s Comments 9-10. Koyo states: “the
evidence on the record shows that, not only did the Japanese
producers [lack] the ability to substantially increase TRB
production in Japan for shipment to the United States, but they
also could not have easily shifted shipments to the United States
sales from other markets.” Koyo’s Comments at 10.
B. Analysis
Section 1675a(a)(4) (1994) of Title 19 of the United States
Code states that “in evaluating the likely impact of imports of the
subject merchandise on the industry if the order is revoked . . .
Court No. 00-08-00386 Page 17
the Commission shall consider all relevant economic factors which
are likely to have a bearing on the state of the industry in the
United States . . . .” The Court found that the ITC did not
“adequately explain why an increase in Japanese imports of the
subject merchandise would not injure the remaining United States
industry; that is, TRB producers other than those owned by Japanese
companies.” Timken, 27 CIT at ___, 264 F. Supp. 2d at 1278. The
Court, however, finds that on remand the Commission adequately
explains the impact an increase in volume of the subject imports
would have on the entire United States domestic industry.
The Commission reasonably determined that the domestic
industry would not be injured even if all available Japanese
production capacity were used to produce TRBs for the United States
market. See Remand Determination at 6. The ITC’s determination is
based on record evidence indicating what percentage of total
apparent United States consumption (by quantity) in 1998 a high
Japanese production level would constitute. The ITC further
explains that, based on the projected moderate growth of the TRB
industry, “any possible increase in subject import volume that
might occur within the reasonably foreseeable future likely would
come out of an increased demand in the market, not at the expense
of the domestic industry.” Id. at 6-7.
Court No. 00-08-00386 Page 18
The ITC based this determination on a number of factors,
including the relationship between the Japanese producers and their
United States affiliates. The Court does not agree with Timken
that the Commission re-characterized its original finding regarding
the significance of the relationship between the Japanese producers
and their United States affiliates. “It is within the Commission’s
discretion to make reasonable interpretations of the evidence and
to determine the overall significance of any particular factor or
piece of evidence.” NMB Sing. Ltd. v. United States, 27 CIT ___,
___, 288 F. Supp. 2d 1306, 1334 (2003) (quoting Maine Potato
Council v. United States, 9 CIT 293, 300, 613 F. Supp. 1237, 1244
(1985)). Here, the ITC clarified that the relationship between the
Japanese producers and their United States affiliates is an
additional factor that would likely limit the volume of subject
imports from Japan in the reasonably foreseeable future. The Court
finds that the ITC properly applied its discretion in weighing the
record evidence regarding the relationship between the Japanese
producers and their United States affiliates. The Court also finds
that the Remand Determination provides sufficient explanation as to
why an increase in imports from Japan would not injure the United
States domestic industry.
Court No. 00-08-00386 Page 19
III. The Commission’s Determination Regarding the TRB Industry’s
Business Cycle
A. Contentions of the Parties
1. Timken’s Contentions
Timken complains that the Commission erroneously concluded
that the TRB industry has no significant business cycle. See
Timken’s Comments at 7-15. Timken asserts that the record included
evidence demonstrating that the TRB industry had peaked and was
poised for a downturn. See id. at 8. Furthermore, Timken states
that “[b]ecause the Commission had already observed an industry
business cycle based on apparent consumption in the [United States]
TRB industry during the original investigation, the existence of a
TRB business cycle was an established fact already on the record.”
Id. at 9-10 (citing Tapered Roller Bearings and Parts Thereof, and
Certain Housings Incorporating Tapered Rollers from Hungary, The
People’s Republic of China, and Romania (“1987 Review”), Inv. Nos.
731-TA-341, 344, and 345 (Final), USITC Pub. 1983, List 1, PD 978,
at A-24 (June 1987)). Timken asserts that it supplemented
consumption data collected by the Commission showing that the
industry was experiencing peak demand during the POR, with
information about its own business and TRB customers. See Timken’s
Comments at 10.
Court No. 00-08-00386 Page 20
Timken contends that the information it submitted showed that
its TRB business devoted to a specific type of customer had peaked
and was likely to be on a downward cycle if the order were revoked.
See id. (citing proprietary material). Timken asserts that it
“tracked its own return on investment for a 20-year period which
showed clear peaks in 1987-88 and 1996-97.” Id. In addition,
Timken states that it submitted information indicating the reduced
demand already experienced by TRB customers in farm machinery,
mining machinery, power transmission, and steel products. See id.
at 11. Timken maintains that it responded to the declines in
demand for TRBs by limiting inventories and capital spending and
reducing employment levels. See id. at 12.
Timken complains that the Commission’s treatment of the data
is not consistent with its treatment of similar information in a
different review. See id. (citing Gray Portland Cement and Cement
Clinker from Japan, Mexico, and Venezuela, Inv. Nos. 303-TA-21
(Review) and 731-TA-451, 461, and 519 (Review), USITC Pub. 3361 at
40-41 (Oct. 2000)). Timken points out that the ITC “specifically
considered the fact that the demand cycle in that sunset review had
peaked with slower or no growth expected in the reasonably
foreseeable future.” Timken’s Comments at 12. Timken asserts that
“[l]ike the cement industry, the Commission found the TRB industry
to be capital intensive with ‘high fixed costs’ requiring high
Court No. 00-08-00386 Page 21
capacity utilization rates to maximize return on investment.” Id.
at 13. In the case at bar, however, Timken complains that the ITC
“did not consider the current condition of the industry in the
context of its business cycle as was done in Cement.” Id. Timken
also takes issue with the Commission’s approach of grouping
together all sizes and number of rows of TRBs to determine capacity
utilization. See id. Timken argues that in relying “only on
capacity utilization figures based on quantity [the ITC] did not
take into account the effect of the downturn among industrial
customers for bearings.” Id. at 15.
2. ITC’s Contentions
The Commission responds that it properly considered the
relevant economic factors within the context of the business cycle
and conditions of competition that are distinctive to the domestic
TRB industry. ITC’s Comments at 15-20. The ITC asserts that it
repeatedly requested information relevant to the domestic industry
regarding the business cycle and conditions of competition during
the five-year review. See id. at 16. According to the Commission,
these “requests did not yield much information evidencing a well-
defined business cycle, let alone information pertinent to the
domestic industry as a whole, or where the industry as a whole
would be positioned with respect to a business cycle in the
reasonably foreseeable future.” Remand Determination at 9. The
Court No. 00-08-00386 Page 22
ITC states that Timken repeats the arguments it previously made
before the agency, such as its argument that the ITC should be
bound by its findings in the original investigation. See ITC’s
Comments at 17-18. The ITC responds that this Court has found that
the ITC must consider its prior injury determination, but that
these findings are not dispositive. See id. at 18 (citing Timken,
264 F. Supp. 2d at 1274).
In addition, the ITC argues that, “contrary to Timken’s
assertion, the Commission never found the existence of a business
cycle in any of the underlying original investigations to this
five-year review.” Id. (emphasis in original). The Commission
points out that “the cite provided by Timken . . . is to a sentence
in a staff report that was never explicitly adopted in an opinion
of the Commission.” Id. at n.66. The ITC also asserts that its
proceedings are sui generis and that in the review at issue it
“found that there was not much information in these proceedings
evidencing a well-defined business cycle in [the TRB] industry, let
alone information pertinent to the domestic industry as a whole, or
where the industry as a whole would be positioned with respect to
a business cycle in the reasonably foreseeable future.” Id. at 18.
The Commission maintains that its analysis was based on the lack of
a distinctive business cycle in the TRB industry:
[I]ts conclusion that the domestic industry is not in a
vulnerable state, that the TRB market is expanding,
Court No. 00-08-00386 Page 23
apparent domestic consumption is increasing, the domestic
industry is highly concentrated and profitable, and the
domestic industry’s market share has increased to the
level held during the original 1987 investigation as
capacity and capacity utilization increased
substantially, as well as its conclusions concerning the
absence of significant likely volume and price effects.
Id. at 19. Finally, the ITC argues that “Timken simply has not
shouldered its burden under 28 U.S.C. § 2639(a)(1) to demonstrate
why the Commission’s remand determination is not supported by
substantial evidence or otherwise in accordance with law.” Id. at
20.
3. NSK, Koyo, and NTN’s Contentions
Defendant-intervenors agree that the Commission properly
concluded that the TRB domestic industry does not have an
independent business cycle, but rather relies on the business
cycles of its end-use customers. See NSK’s Opp’n Comments at 6-8;
Koyo’s Comments at 6-8; NTN’s Comments at 6-8. Koyo asserts that,
“[i]ndeed, Timken itself has acknowledged the fact that demand for
TRBs is derived from the business cycles of the downstream
industries.” Koyo’s Comments at 7. NSK contends that “substantial
facts thus support the Commission’s decision that, whereas various
TRB purchasers operate subject to their own distinctive business
cycles, TRB producers just respond to purchasers’ demands, and
consequently do not experience a business cycle of their own.”
NSK’s Opp’n Comments at 7. Koyo adds that the ITC’s analysis
sufficiently addresses its statutory responsibility to consider
Court No. 00-08-00386 Page 24
economic factors “within the context of the business cycle.” See
Koyo’s Comments at 7. Koyo also states that while Timken may not
agree with the ITC’s conclusions regarding the impact that the
business cycles of the end-user industries has on the business
cycle of the TRB industry, such disagreement solely concerns the
weighing of evidence which is not an issue for this Court to
decide. See id. at 7-8.
Koyo asserts that the Commission correctly veered from its
decision in a previous sunset review regarding a different industry
because the ITC’s determination is fact intensive. See id. at 8.
NTN adds that the previous review and the review at issue are not
similar because in the former case the ITC found the business cycle
to be tied to seasonal demands in consumption whereas, in the TRB
industry, the ITC determined that the business cycle is tied to
demand by a variety of industries and customers. See NTN’s
Comments at 8. Koyo asserts that the ITC’s decision in one sunset
review regarding the economic significance of the business cycle is
of limited value in a sunset review involving a different industry.
See Koyo’s Comments at 8.
B. Analysis
The Court is satisfied with the Commission’s explanation in
the Remand Determination of its consideration of relevant economic
factors in the context of the business cycle and the conditions of
Court No. 00-08-00386 Page 25
competition that are distinctive to the United States TRB industry.
The Commission explains that its requests for information regarding
the domestic business cycle “did not yield much information
evidencing a well-defined business cycle, let alone information
pertinent to the domestic industry as a whole, or where the
industry as a whole would be positioned with respect to a business
cycle in the reasonably foreseeable future.” Remand Determination
at 9. The Court finds that the ITC reasonably found that the
record in the review at issue does not indicate a specific business
cycle for the United States TRB industry.
The ITC also reasonably concluded that demand for TRBs is
“derived and driven by the demand for end-use products.” Id. at 10.
The Commission states that “[g]iven the wide variety of customers
and the multitude of distinct industries for which TRBs are used,
we do not find this industry to be characterized by a regular and
measurable business cycle that might be characteristic of other
industries.” Id. Section 1675a(a)(4) of Title 19 of the United
States Code directs the Commission to analyze “all relevant
economic factors described in this paragraph within the context of
the business cycle . . . .” In the original investigation, the TRB
industry’s business cycle was dependent on the business cycles of
Court No. 00-08-00386 Page 26
end-users.3 See 1987 Review, Pub. 1983, List 1, PD 978, at A-24.
Here, however, the ITC has sufficiently explained that it could not
find a discernable business cycle for the domestic TRB industry.
The Commission explains that
the diversity of customers and industries for which TRBs
are used, as well as the small share of the cost of the
finished products for which TRBs are used, limits the
effect that downturns in demand from particular customers
or user industries, particularly to the extent that at
any given time, TRB end user industries are likely at
different positions in their business cycles than other
TRB end user industries.
Remand Determination at 11. Based on its findings regarding the
diverse customer base and limited effect of downturns in demand,
the Commission reasonably concluded that the TRB industry does not
experience discernable “recurrent expansion and contraction of
economic activity.” BLACK ’S LAW DICTIONARY 192 (7th ed. 1999)
(defining “business cycle”) (emphasis added). Accordingly, the
Commission’s explanation of relevant factors in the context of the
appropriate business cycle for TRBs is reasonable and supported by
record evidence.
3
The Court notes that the Commission correctly asserts
that it did not find the existence of a business cycle in any of
its previous reviews concerning TRBs. See ITC’s Comments at 18.
Rather, the conclusions regarding the TRB industry’s business cycle
was contained in a staff report. See 1987 Review, Pub. 1983, List
1, PD 978, at A-24. The staff report states that “[t]here is very
little seasonality with regard to [United States] consumption of
[TRBs], primarily because the broad industrial base of the market
allows for independent industry consumption trends to offset each
other. There appears to be about a 4- to 6- year business cycle to
the [TRB] industry . . . .” Id.
Court No. 00-08-00386 Page 27
The Court does not agree with Timken’s assertion that the
Commission should follow its findings from an investigation
concerning different products altogether. See Timken’s Comments at
12-13. The Commission must take into consideration the many
economic variables unique to each review. Accordingly, there is
limited precedential value to previous reviews because the
Commission is not required to make identical determinations in
each. Instead, the Commission must independently consider each
subject import and the circumstances of each investigation as sui
generis. See Timken Co. v. United States, 2004 Ct. Intl. Trade
LEXIS 7 *54-55 (2004); Armstrong Bros. Tool Co. v. United States,
84 Cust. Ct. 102, 115, 489 F. Supp. 269, 279, C.D. 4848 (1980); see
also Citrusco Paulista, S.A. v. United States, 12 CIT 1196, 1209,
704 F. Supp. 1075, 1087 (1988). The ITC acted properly in
disregarding its findings from a review concerning different
subject imports and a different industry altogether. Accordingly,
the Court finds that the Commission sufficiently explained its
findings in the context of the appropriate business cycle as
mandated in Timken, 27 CIT at ___, 264 F. Supp. 2d at 1285.
CONCLUSION
The Court finds that the Commission sufficiently met its
burden of (a) explaining the likely impact of TRB imports from
Court No. 00-08-00386 Page 28
Japan on the entire United States TRB industry; (b) investigating
and explaining the basis used by Japanese TRB producers to report
their production capacity; and (c) explaining its findings in the
context of the appropriate business cycle. Judgment will be
entered accordingly.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: February 25, 2004
New York, New York