279 F.Supp.3d 1233
Ct. Int'l Trade2017Background
- Commerce conducted a new-shipper antidumping review of tapered roller bearings (TRBs) from the PRC for POR June 1, 2010–May 31, 2011 after GGB (exporter) and Stemco (U.S. importer) requested review; Commerce preliminarily assigned a zero margin and ultimately assigned a 12.64% margin in the Final Results.
- Because GGB’s merchandise was produced in an NME (China), Commerce valued normal value using surrogate country data (Thailand chosen as primary surrogate).
- For overhead, SG&A, and profit Commerce computed financial ratios from Thai bearing manufacturers’ financial statements (NSK and JTEKT among others); GGB argued NSK’s statement was distorted by Thai Investment Promotion Act (IPA) benefits and that Minebea’s statement should have been used instead.
- For labor, Commerce used ILO Chapter 6A "total manufacturing" wage data for Thailand (2005 data adjusted to POR) because industry-specific ILO data for Thailand were unavailable; GGB argued industry-specific ILO data from the Philippines or Ukraine on the record were superior.
- The court sustained Commerce’s choice to rely (in part) on NSK financials (finding no record-based reason to suspect countervailable distortion) but remanded the labor valuation for Commerce to determine whether the Philippines and/or Ukraine are “significant producers of comparable merchandise” and then re-evaluate the best available labor data.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Use of NSK financial statement for surrogate overhead/SG&A/profit | NSK statement is distorted by IPA countervailable subsidies; Minebea statement (undistorted) should be used | Commerce reasonably reviewed financials, found no record reason to "believe or suspect" countervailable distortion in NSK and Minebea lacked necessary cost detail | Sustained: Commerce permissibly used NSK; record did not compel finding of countervailable distortion and Minebea lacked required cost breakout |
| Whether IPA §28 benefits are countervailable | §28 benefits granted to NSK were contingent on export performance and thus countervailable | Commerce’s practice is to review whether promotion approvals were export-contingent; record lacked evidence showing export commitments for NSK’s §28 benefits | Held for Commerce: no record evidence compelled finding that NSK’s §28 benefits were export-contingent; Commerce’s approach was reasonable |
| Whether IPA §36(1) import-duty exemptions render NSK’s financials distorted | §36(1) is an export-contingent exemption and thus countervailable in NSK’s case | Commerce properly applied precedent and regulation (19 C.F.R. §351.519) to analyze controls and found no record basis to treat NSK’s §36(1) items as countervailable here | Held for Commerce: on this record Commerce reasonably declined to treat NSK’s §36(1) items as countervailable |
| Surrogate labor valuation (Thailand ILO data vs. Philippines/Ukraine industry data) | GGB: industry-specific ILO data from Philippines/Ukraine on record are more specific and thus better available information; Commerce unlawfully restricted to primary surrogate country data | U.S./Timken: Commerce lawfully applied its Labor Methodologies policy and selected Thailand; Philippines/Ukraine are not shown to be significant producers of comparable merchandise | Remanded: Commerce must decide whether Philippines and/or Ukraine are "significant producers of comparable merchandise" per 19 U.S.C. §1677b(c)(4)(B) and then reassess which labor data are best available; Commerce’s failure to make the "significant producer" finding was legally erroneous |
Key Cases Cited
- Qingdao Sea–Line Trading Co. v. United States, 766 F.3d 1378 (Fed. Cir. 2014) (failure to raise issue administratively constitutes failure to exhaust)
- Dorbest Ltd. v. United States, 604 F.3d 1363 (Fed. Cir. 2010) (exhaustion promotes administrative opportunity to correct errors)
- United States v. L.A. Tucker Truck Lines, 344 U.S. 33 (U.S. 1952) (courts should generally not overturn administrative decisions absent objection at the appropriate time)
- Agro Dutch Indus. Ltd. v. United States, 508 F.3d 1024 (Fed. Cir. 2007) (exception to exhaustion for pure legal questions)