SKF USA INC., SKF France S.A., SKF Aerospace France S.S.S., SKF GmbH, and SKF Industrie S.p.A., Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee, and Timken U.S. Corporation, Defendant-Appellee.
No. 2010-1128
United States Court of Appeals, Federal Circuit
Jan. 7, 2011
630 F.3d 1365
The only added wrinkle is that Allvoice took the extra step of incorporating under the laws of Texas sixteen days before filing suit. But that effort is no more meaningful, and no less in anticipation of litigation, than the others we reject.
In Koster v. Lumbermens Mutual Casualty Co., 330 U.S. 518, 67 S.Ct. 828, 91 L.Ed. 1067 (1947), the Supreme Court explained that “[u]nder modern conditions corporations often obtain their charter from states where they no more than maintain an agent to comply with local requirements, while every other activity is conducted far from the chartering state.” Id. at 527-28, 67 S.Ct. 828. The Court further explained that the “[p]lace of corporate domicile in such circumstances might be entitled to little consideration” under the doctrine of forum non conveniens, “which resists formalization and looks to the realities that make for doing justice.” Id. at 528, 67 S.Ct. 828.
Here, the realities make clear that the Western District of Washington is comparatively the only convenient and fair venue in which to try this case.
Allvoice presents arguments why mandamus should not issue. We have carefully considered these arguments, but find them unpersuasive. We note that Allvoice asserts that Microsoft‘s attempt to also transfer this case to the United States District Court for the Southern District of Texas should be weighed against mandamus. Because the thrust of that motion was to transfer the case to a court that had previous experience adjudicating the patent, we cannot say that any asserted inconsistency with regard to the convenience of trial in the state of Texas as a whole should preclude transfer to a venue that is far more convenient and fair.
Accordingly,
IT IS ORDERED THAT:
The petition for a writ of mandamus is granted. The district court shall vacate its order denying Microsoft‘s motion to transfer and transfer the case to the Western District of Washington.
Herbert C. Shelley, Steptoe & Johnson LLP, of Washington, DC, argued for plaintiffs-appellants. With him on the brief were Alice A. Kipel and Laura R. Ardito.
Claudia Burke, Trial Attorney, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee United States. With her on the brief were
Geert De Prest, Stewart and Stewart, of Washington, DC, argued for defendant-appellee Timken U.S. Corporation. With her on the brief were Terence P. Stewart and Lane S. Hurewitz.
Neil R. Ellis, Sidley Austin LLP, of Washington, DC, for amici curiae JTEKT Corporation and Koyo Corporation of U.S.A. With him on the brief were Eric A. Shumsky and Jill Caiazzo.
Matthew P. Jaffe, Crowell & Moring LLP, of Washington, DC, for amici curiae NSK Ltd. and NSK Corporation. With him on the brief were Robert A. Lipstein and Alexander H. Schaefer.
Before GAJARSA, LINN, and DYK, Circuit Judges.
Opinion for the court filed by Circuit Judge DYK. Opinion Concurring in Part and Dissenting in Part filed by Circuit Judge LINN.
DYK, Circuit Judge.
Plaintiffs SKF USA Inc., SKF France S.A., SKF Aerospace France S.A.S., SKF GMBH, and SKF Industrie S.p.A. (collectively “SKF” or “plaintiffs“) appeal a decision of the Court of International Trade (“Trade Court“). That decision affirmed the final determination of the United States Department of Commerce (“Commerce“) in its seventeenth administrative review of antidumping duty orders on ball bearings and parts thereof from France,
BACKGROUND
SKF GmbH, an SKF company located in Germany, produces and sells ball bearings and also purchases some finished bearings from an unaffiliated German competitor to complement its product line. SKF exports some of these products to the United Kingdom. SKF, along with other bearing exporters, is subject to an antidumping duty order issued by Commerce with respect to sales of ball bearings from Germany, among other countries. The original antidumping order was entered in 1989. Thereafter, Commerce has conducted administrative reviews. “Recognizing that prices and costs change over the course of time, Congress provided that Commerce shall conduct an annual administrative review ‘if a request for such a review [is] received.‘” Dofasco Inc. v. United States, 390 F.3d 1370, 1372 (Fed. Cir.2004). During an administrative review, Commerce determines a new dumping margin. See
Dumping occurs when the price at which imported merchandise is sold in the United States is less than the merchandise‘s “normal value“—i.e. fair value in the home market. See
During its original investigation and the next sixteen administrative reviews of ball bearing antidumping orders, Commerce used SKF‘s acquisition costs in calculating the CV of subject ball bearings SKF sold in the United States but obtained from its unaffiliated supplier. During the fifteenth administrative review, the petitioner, Timken U.S. Corporation (“Timken“), apprised Commerce that some respondents had acquired finished bearings from unaffiliated suppliers and resold them in the United States. Commerce noted that “[g]iven the statutory emphasis on the use of actual costs of production in calculating COP and CV, it may be appropriate” to require actual cost data. J.A.2003. However, Commerce deferred implementation of this change, reasoning that the review was at too late a stage to require acquisition of cost data from unaffiliated suppliers. Id. at 2004-05. In the future, Commerce suggested that it might “require the respondents to report COP and CV information for purchases from their unaffiliated suppliers where facts ... reflect the facts in other proceedings ... in which we have required the COP and CV information from unaffiliated suppliers.” Id. at 2005.
During the seventeenth review, Commerce for the first time required respondents to produce actual COP and CV data from their unaffiliated suppliers when a “substantial proportion” of the respondent‘s sales were “sales of merchandise
Commerce proposed to use these cost data in calculating CV. SKF and other respondents objected to Commerce‘s proposed use of this actual cost data in calculating CV. Presumably, SKF objected because it worried that using the unaffiliated supplier‘s actual cost data would yield a higher COP and CV than its acquisition costs, leading to a higher dumping margin. SKF argued, inter alia, that: 1) the statute did not permit Commerce to use the actual cost data from unaffiliated suppliers; 2) Commerce did not adequately explain its change in methodology; and 3) use of unaffiliated supplier data violated due process because SKF could not compel its supplier to cooperate and because SKF could not have access to the data for use in the proceedings. Also, SKF could not “knowingly price” in the United States to avoid dumping because it would not know its supplier‘s actual costs.
Commerce issued its final determination using the unaffiliated supplier‘s actual production costs to calculate CV. In the Issues and Decision Memorandum, Commerce responded to some of SKF‘s arguments. It explained that the statutory scheme provided for calculating COP and CV “on the basis of actual production costs.” Issues and Decision Memorandum for the Antidumping Duty Administrative Reviews of Ball Bearings and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom for the Period of Review May 1, 2005, through April 30, 2006, at 47 (October 1, 2007) (“Decision Mem.“), available at http://ia.ita.doc.gov/frn/summary/multiple/e7-20151-1.pdf. It also warned that “[i]f acquisition costs do not capture all of the actual costs of the manufacturer supplying the bearings to the reseller, they are not an appropriate basis for the calculation of CV and ... the use of such acquisition costs would distort the reseller‘s dumping margin due to the missing elements of cost.” Id. at 48. Moreover, it claimed Commerce “has had a longstanding practice of using the actual production costs of unaffiliated suppliers in lieu of the exporter‘s acquisition costs to calculate COP and CV” and is “moving towards consistency throughout its cases.” Id. at 48-49 (citing Honey from Argentina, 66 Fed.Reg. 50611 (Dep‘t of Commerce Oct. 4, 2001) (final determination); Elemental Sulphur from Canada, 61 Fed.Reg. 8239, 8251 (Dep‘t of Commerce Mar. 4, 1996) (final administrative review); Fresh and Chilled Atlantic Salmon from Norway, 56 Fed.Reg. 7661, 7665 (Dep‘t of Commerce Feb. 25, 1991) (final determination)).
Responding to SKF‘s contention that it could not access the unaffiliated supplier
In the final decision, Commerce also continued to utilize zeroing to calculate dumping margins. Zeroing refers to a practice under which, when the export price is higher than the normal value of the subject merchandise, Commerce assigns it a value of zero rather than a negative value in calculating the average dumping margin. See SKF USA Inc. v. United States, 659 F.Supp.2d 1338, 1346 (Ct. Int‘l Trade 2009).
SKF sought review in the Trade Court, and that court affirmed.2 The Trade Court agreed that the statute allowed Commerce to use unaffiliated supplier cost information. The Trade Court also found Commerce provided a reasonable explanation for methodology change. It dismissed SKF‘s due process concerns because SKF‘s counsel could review the unaffiliated supplier‘s data. It did not, however, address SKF‘s concerns about adverse inferences and its inability to price its products to avoid dumping. Finally, the Trade Court held that zeroing methodology was not impermissible. SKF timely appealed, and we have jurisdiction pursuant to
DISCUSSION
I
We review Trade Court antidumping decisions de novo, applying the same standard of review as the Trade Court applies to Commerce‘s determinations. Corus Staal BV v. Dep‘t of Commerce, 395 F.3d 1343, 1346 (Fed. Cir.2005). Commerce‘s determination must be sustained if it is supported by substantial evidence and otherwise in accordance with law. Id. (citing
Commerce argues that, in conjunction,
(1) the cost of materials and fabrication or other processing of any kind employed in producing the merchandise, during a period which would ordinarily permit the production of the merchandise in the ordinary course of business; [and] (2)(A) the actual amounts incurred and realized by the specific exporter or producer being examined in the investigation or review for selling, general, and administrative expenses, and for profits, in connection with the production and sale of a foreign like product....
the exporter of the subject merchandise, the producer of the subject merchandise, or both where appropriate. For purposes of section 1677b of this title, the term “exporter or producer” includes both the exporter of the subject merchandise and the producer of the same subject merchandise to the extent necessary to accurately calculate the total amount incurred and realized for costs, expenses, and profits in connection with production and sale of that merchandise.
On the face of these provisions, Commerce can utilize unaffiliated suppliers’ records for cost of production data in lieu of the exporter‘s acquisition cost. The statute explicitly provides that costs should be “based on the records of the exporter or producer of the merchandise,”
However, SKF argues that other provisions of the statute,
Similarly, subsection
We cannot agree that sections
SKF also argues that Commerce‘s approach violates due process because SKF cannot review its unaffiliated supplier‘s cost data and cannot compel an unaffiliated company to provide such data. Therefore, it risks “a determination of adverse facts available as a consequence of an unaffiliated competitor‘s failure to comply with a request” for cost data. Appellant‘s Br. 28. While, as discussed below, SKF‘s concerns raise questions as to the adequacy of Commerce‘s explanation for its change in approach, they do not constitute a due process violation. A due process objection can be raised only in the particular case where there has been a violation. See Thorpe v. Housing Auth. of Durham, 393 U.S. 268, 284 n. 49, 89 S.Ct. 518, 21 L.Ed.2d 474 (1969) (declining to address plaintiff‘s claim that it would be due process violation to evict her arbitrarily because, under the facts on review, she had not yet been evicted). Here, SKF‘s counsel had access to and a chance to review the data under APO procedures, and the supplier provided the data; Commerce did not utilize adverse facts available. Although counsel‘s access to the data without an ability to consult with the respondent creates a disadvantage, it is not so substantial as to raise any constitutional concerns. Thus, there was no due process violation.
II
SKF also asserts that Commerce did not provide a reasonable explanation for its change in methodology after sixteen administrative reviews. During the prior reviews, SKF and other respondents submitted their acquisition cost for finished bearings purchased from unaffiliated suppliers as representative of its costs for that merchandise. Commerce apparently approved of this practice. In its 1988 Request for Information to the respondents, Commerce explained that the “[c]ost of materials should include the purchase price, transportation charges, duties and all other expenses normally associated with the
When an agency changes its practice, it is obligated to provide an adequate explanation for the change. See Motor Vehicle Mfrs. Ass‘n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 42, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). In State Farm, the Court found the Department of Transportation did not adequately explain its decision to rescind a regulation that vehicles be equipped with passive restraints (airbags or automatic seatbelts), in large part because the agency too quickly dismissed other alternatives and the safety benefits of retaining the existing rule. Id. at 46-56, 103 S.Ct. 2856.3 We have held that the State Farm requirement applies to Commerce‘s antidumping proceedings. See SKF USA, Inc. v. United States, 263 F.3d 1369, 1382 (Fed. Cir.2001). In SKF USA, we stated that the antidumping statute is “highly complex” and “[t]he more complex the statute, the greater the obligation on the agency to explain its position with clarity.” Id. at 1382-83.
We think that Commerce has adequately explained why a change would serve legitimate objectives. Commerce concluded using unaffiliated supplier data to calculate CV would allow it to “capture all of the actual costs of the manufacturer,” while using acquisition costs would “distort the reseller‘s dumping margin due to the missing elements of cost.” Decision Mem. at 48. Commerce also noted its “longstanding practice of using the actual production costs of unaffiliated suppliers in lieu of the exporter‘s acquisition costs to calculate COP and CV” and its “mov[e] towards consistency.” Id. at 48-49. Indeed, Commerce cited numerous cases where it required unaffiliated supplier data, including Individual Quick Frozen Red Raspberries from Chile, 69 Fed.Reg. 47869, 47872 (Dep‘t of Commerce Aug. 6, 2004) (preliminary administrative review results), in which it explained that “[w]here the sale to an exporter or reseller is finished subject merchandise, the Department‘s practice is to rely on the COP of the producer.”4 We agree with Commerce that consistency is an important interest and that it was understandable for it to change methodologies in an attempt to align this case with its past practice.5
Nevertheless, Commerce still failed to comply with its State Farm obligation to
In this case, Commerce did not address two significant concerns raised by SKF. The first of these was that it could not change its pricing to avoid dumping because it would have no knowledge of its unaffiliated supplier‘s actual production costs. Essentially, SKF “will never be able to adjust its sales or pricing, or even its acquisition policies, in an effort to increase its compliance with the U.S. antidumping law and decrease its dumping liability.” Appellant‘s Br. 29. Even the petitioner, Timken, admitted at oral argument that it is difficult for an exporter to know whether it is dumping or to change its pricing practice to avoid dumping when it does not know or control its unaffiliated supplier‘s costs. The ability to control pricing to avoid dumping is also important because, under
Similarly, Commerce did not address SKF‘s concern that Commerce would apply an adverse inference if the unaffiliated supplier failed to provide cost data. While no such adverse inference was drawn here,
In failing to consider these two problems, we find that Commerce failed to adequately explain its change of methodology after sixteen reviews. See Pub. Citizen v. Fed. Motor Carrier Safety Admin., 374 F.3d 1209, 1217 (D.C.Cir.2004) (holding that the failure to consider an important aspect of the problem was alone “dispositive” and required reversal under State Farm).
III
Finally, SKF argues that Commerce improperly used zeroing in calculating its weighted-average dumping margin because it is prohibited by the World Trade Organization (“WTO“). Commerce changed its practice for original investigations and no longer uses zeroing for calculation of weighted average dumping margins, but it continues to use zeroing during administrative reviews. See Antidumping Proceedings: Calculation of the Weighted Average Dumping Margin During an Antidumping Duty Investigation; Final Modification, 71 Fed.Reg. 77722, 77724 (Dec. 27, 2006). In Timken Co. v. United States, 354 F.3d 1334, 1341-45 (Fed. Cir.2004), the court held that its governing statute did not forbid the use of zeroing. In U.S. Steel Corp. v. United States, 621 F.3d 1351 (Fed. Cir.2010), we upheld Commerce‘s application of its new policy not to use zeroing in original investigations. Even after Commerce changed its policy with respect to original investigations, we have held that Commerce‘s application of zeroing to administrative reviews is not inconsistent with the statute. See Corus Staal BV v. United States, 502 F.3d 1370, 1375 (Fed. Cir.2007). Moreover, we have held that WTO decisions do not change United States law unless implemented pursuant to an express statutory scheme. See, e.g., NSK Ltd. v. United States, 510 F.3d 1375, 1379-80 (Fed. Cir.2007); Corus Staal BV, 395 F.3d at 1349. The WTO decisions cited by SKF have not been so implemented.
IV
For the foregoing reasons, we affirm the Trade Court‘s decision that Commerce has
AFFIRMED-IN-PART AND VACATED-IN-PART AND REMANDED
COSTS
No costs.
LINN, Circuit Judge, concurring in part and dissenting in part.
I am pleased to join the majority‘s holding that Commerce has the authority to use unaffiliated suppliers’ actual costs of production in calculating CV and to utilize zeroing. I respectfully dissent only from the portion of the opinion concluding that Commerce failed to comply with its obligation under Motor Vehicle Manufacturers Association of the United States, Inc. v. State Farm Mutual Automobile Insurance Co. (State Farm), 463 U.S. 29, 42, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983) and remanding to Commerce for further explanation.
The majority held that Commerce failed to satisfy its State Farm obligation by insufficiently explaining why two of SKF‘s concerns about the use of unaffiliated suppliers’ actual cost data were not implicated or why they were outweighed by competing considerations. Maj. Op. at 1373-75. Under State Farm, an agency explanation may be unreasonable if the agency “entirely failed to consider an important aspect of the problem.” 463 U.S. at 42, 103 S.Ct. 2856 (emphasis added). “[T]he fact that certain information is not discussed in a Commission determination does not establish that the Commission failed to consider that information. Rather, the Commission need only discuss material issues of law or fact.” Timken U.S. Corp. v. United States, 421 F.3d 1350, 1355-56 (Fed. Cir.2005) (internal citations and quotations omitted). This court should “uphold a decision of less than ideal clarity if the agency‘s path may reasonably be discerned.” State Farm, 463 U.S. at 43, 103 S.Ct. 2856 (internal citations and quotations omitted).
The majority vacates the Trade Court‘s decision and remands for Commerce to provide additional responses to two of SKF‘s asserted concerns. In my view, neither of SKF‘s concerns amount to an important aspect of the problem or a material issue of law or fact.
SKF‘s first concern is that it could not change its pricing to avoid dumping because it would have no knowledge of its unaffiliated suppliers’ actual production costs. SKF, however, offers no explanation why it could not simply require the actual cost of production data from an unaffiliated supplier as a condition for purchase. Further, Commerce did not entirely fail to consider this argument. Commerce considered this concern in its response to SKF‘s assertion that it faced a catch-22 of either sharing confidential information with a competitor, risking an antitrust violation, or “attempt[ing] to price [its] products without any apparent reference point for normal value.” Decision Mem. at 48. Commerce thus considered, but “disagree[d] with[,] SKF‘s assertion.” Id.
SKF‘s second concern relates to the potential for Commerce to draw adverse inferences if the unaffiliated supplier fails to
In light of the foregoing, it is my view that neither of SKF‘s concerns raises an important aspect of the problem or a material issue warranting a vacatur and remand. Commerce has adequately explained its change in practice, adequately considered SKF‘s concerns, and Commerce‘s path may reasonably be discerned from its decision. Commerce explained that its decision was based upon the statutory emphasis on the use of actual costs, the Statement of Administrative Action‘s language contemplating the same, the inability of acquisition costs to properly capture the actual costs of the manufacturer in this situation, and the need for more consistency. Decision Mem. at 47-49. Not only did Commerce provide a reasoned explanation for its change in practice after sixteen years, but Commerce warned SKF during the fifteenth administrative review that it would be changing to this methodology and did not implement the change until two review years later, during the seventeenth administrative review. Even if Commerce‘s explanation of the two concerns raised by SKF and found wanting by the majority lacked ideal clarity, a point with which I disagree, this court should “uphold a decision of less than ideal clarity if the agency‘s path may reasonably be discerned.” State Farm, 463 U.S. at 43, 103 S.Ct. 2856.
Because Commerce sufficiently addressed all material concerns and its path can be reasonably discerned, I see no need to remand for further explanation and would affirm.
MANOR CARE, INC. (formerly known as HCR Manor Care, Inc.), HCR Manor Care, Inc., and Manor Care of America, Inc., Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee.
No. 2010-5038
United States Court of Appeals, Federal Circuit
Jan. 21, 2011.