FINAL RESULTS OF
REDETERMINATION ON REMAND
FINAL SCOPE RULING-ANTIDUMPING DUTY ORDER
ON CYLINDRICAL ROLLER BEARINGS AND PARTS THEREOF FROM JAPAN-REGARDING A CERTAIN CYLINDRICAL ROLLER BEARING
PRODUCED BY KOYO SEIKO CO., LTD., AND IMPORTED BY
KOYO CORPORATION OF U.S.A. (A-588-804)
The Torrington Company v. United States
Court No. 98-09-02903
On July 14, 1999, the United States Court of International Trade ("the Court") in The Torrington Company v. United States, Court No. 98-09-02903, remanded to the Department of Commerce (the Department) the final scope ruling, entitled Final Scope Ruling-Antidumping Duty Order on Cylindrical Roller Bearings and Parts Thereof From Japan-Regarding a Certain Cylindrical Roller Bearing Produced by Koyo Seiko Co., Ltd., and Imported by Koyo Corporation of U.S.A. (August 10, 1998) ("Final Scope Ruling").
The Court ordered the Department to apply the final scope ruling in accordance with the Court's holding in Timken Co. v. United States, 972 F.Supp. 702 (CIT 1997) ("Timken"), aff'd sub nom. Koyo Seiko Co., Ltd. v. United States, No. 98-1050, -1051, 1998 U.S. App. LEXIS 17524 (Fed. Cir. July 28, 1998).
On November 19, 1999, we released our draft results of redetermination to the Torrington Company ("Torrington"), the petitioner, for comment. Torrington submitted comments on December 3, 1999.
I. FINAL SCOPE RULING
In the Final Scope Ruling, we followed the Department's normal practice, which is to apply a scope determination to the entire period of review ("POR") during which liquidation of entries of the scope merchandise was first suspended for antidumping purposes, and to any subsequent PORs. Liquidation of the subject cylindrical roller bearings ("CRBs") was suspended for antidumping purposes on September 29, 1997. Thus, we applied the scope ruling to entries of the subject CRB dating back to May 1, 1997, the starting point for the 1997-1998 administrative review, and to all entries of subject CRBs subsequent to this date.
In Timken, (1) the Court held that unliquidated merchandise which entered the customs territory of the United States after the publication of the antidumping duty order, but before the issuance of the scope ruling, should be liquidated in accordance with the antidumping duty order. 972 F. Supp. at 703-704. The CIT, however, stated that its holding was not intended to disturb the principles of administrative finality, i.e., require the re-opening or re-review of closed proceedings. Id. at 704. Thus, while a scope determination once made is effective back to the publication of the antidumping duty order, the CIT's holding in Timken requires the Department to apply the scope determination only as far back as the principle of administrative finality warrants - back to unliquidated entries of subject merchandise covered by any administrative review period open at the time the scope issue was first raised, and to all unliquidated entries of in-scope merchandise after that period.
III. REMAND RESULTS
As directed by the Court, we will now apply the Final Scope Ruling in accordance with Timken. The CIT, in Timken, held that the scope determination is effective with the publication of an antidumping duty order, and that the Department should liquidate entries of merchandise suspended since the inception of the antidumping duty order without re-opening or re-reviewing any closed proceeding. Thus, the Department is required to liquidate, under the antidumping duty order on CRBs and parts thereof from Japan, all in-scope merchandise suspended during any administrative review period open at the time the CRB scope issue was first raised. Accordingly, because the CRB scope issue was first raised by petitioner in the context of the 5th administrative review (2) of antifriction bearings ("AFBs") (other than tapered roller bearings) and parts thereof from Japan (May 1, 1993 through April 30, 1994) (see Final Scope Ruling, at 1), we will instruct U.S. Customs ("Customs") to continue to suspend liquidation of all unliquidated entries of scope merchandise entering during and subsequent to the 1993-1994 review period under the CRB antidumping order, pending the conclusion of litigation in connection with the relevant review periods.
IV. COMMENTS RECEIVED
First, the petitioner alleges that the Department's statement, that it will instruct Customs to liquidate all unliquidated entries of scope merchandise entering into the United States during and subsequent to the 1993-1994 review period, appears contrary to the injunctions issued by the Court in connection with pending appeals regarding the fifth, sixth, seventh, eighth, and ninth administrative reviews, which enjoin liquidation of subject entries pending the outcome of litigation. Thus, the petitioner notes that the Department can not issue liquidation instructions for the post 1993 periods until the injunctions are lifted. Second, notwithstanding the issue of the injunctions, the petitioner asserts the application of the scope decision is not limited to entries post May 1, 1993, as the Department erroneously determined. The petitioner contends the Department should issue instructions in accordance with the Court's Order that "the matter is remanded to Commerce to apply the final scope ruling,...[applying]...an effective date in accordance with this Court's holding in Timken Co. v. United States...." According to the petitioner, the instructions should address the Department's scope determination, i.e., the Department should instruct Customs to apply the Department's scope ruling to all unliquidated entries of subject merchandise. As the Court made clear in Timken the scope decision should apply to any entries which are not yet liquidated. In this manner, the petitioner states, any cylindrical roller bearings subject to the scope of the order per the Department's affirmative scope decision and which are not yet liquidated (be it because of an order enjoining liquidation or for any other reason) will remain unliquidated, until such time final liquidation instructions are issued following the conclusion of pending litigation in connection with the relevant review period, at which time the entry must be liquidated in the same manner as other subject merchandise.
We agree with the petitioner that the Department should instruct Customs to continue to suspend liquidation of all unliquidated entries of scope merchandise manufactured and imported by Koyo until such time as final liquidation instructions are issued following the conclusion of pending litigation in connection with the relevant review periods.
We disagree with the petitioner, however, that the scope determination applies back to publication of the antidumping duty order simply because an injunction was issued covering unliquidated entries back to the publication date. The injunction merely maintains the status quo pending a final court decision on the application date for scope determinations. We also disagree with the petitioner's arguments that the Department's redetermination, limiting the application of the scope determination to entries dated May 1, 1993, and later, contradict's the court's instruction in Timken.
As discussed above, in Timken the court stated that its holding was not intended to disturb the principles of administrative finality, i.e. to require the re-opening or re-review of closed proceedings. Id. at 704. For each administrative review, the Department implicitly, if not explicitly, defines the scope of subject merchandise to be examined during the administrative proceeding through its questionnaire. In its questionnaire, the Department requests, among other things, information on sales of the merchandise subject to the antidumping duty order. Parties, including the petitioners, have the opportunity to comment during the administrative proceeding on the breadth of the Department's inquiries, including the questions directed at the issue of scope coverage. The scope coverage issue, like any issue addressed in the administrative proceeding, is subject to judicial review following the final determination in the particular proceeding. Consequently, a party who fails to raise an issue during the administrative proceeding is precluded from raising it for the first time before the court. See Sandvik Steel Co. v. United States and Fujitsu Ten Corp. v. United States, 164 F.3d 596, 597 (Fed. Cir. 1998) (importer's failure to exhaust administrative remedies concerning scope of antidumping duty order precluded judicial review at liquidation). In addition, the Department is also foreclosed from re-opening a closed administrative review wherein no party has claimed an error. See American Trucking Ass'n v. Frisco Transportation Co., 358 U.S. 133, 145 (1958) and Badger-Powhatan v. United States, 633 F.Supp. 1364, 1369 (CIT 1986). Thus, while a scope determination once made is effective back to the publication of the antidumping duty order, the court's holding in Timken requires the Department to apply the scope determination only as far back as the principle of administrative finality permits - back to the first administrative review period open at the time the scope issue was first raised, the period herein defined as the "first POR," and to the subsequent administrative review periods following this "first POR." A scope determination should be applied to all unliquidated entries of subject merchandise from the "first POR" and to all reviews thereafter of the antidumping duty order. To do otherwise would be to re-open the closed proceedings prior to the "first POR" to re-address the Department's scope coverage implicitly or explicitly decided during the administrative proceedings for those periods.
This interpretation of the Court's opinion and order also resolves other problems with a retroactive application of the scope determination to entries pre-dating the beginning of the "first POR." Application of the scope determination prior to the beginning of the "first POR" would raise due process issues. For example, a party may have requested an administrative review if it had known that some or all of its merchandise shipped during the relevant POR was potentially subject to the antidumping duty order. Without some notice that the merchandise could be subject to the order on antifriction bearings from Japan, the foreign respondents and importers had no need to request such a review. In the case of a respondent who had participated in an administrative review preceding the "first POR," the Department calculated a dumping margin for that POR without sales of the merchandise subsequently subject to the scope of the antidumping duty order. Had the scope issue been raised earlier, the margin calculated for the prior POR may have been affected by the inclusion of sales of the "new" subject merchandise. The respondents, however, will have no opportunity to comment on the Department's treatment of sales of the "new" subject merchandise in the context of an administrative review. To provide the parties with an opportunity to comment would require the re-opening of the prior administrative review or the Department to conduct an additional review for these "new" entries. The first option was specifically precluded by the court and the second option is administratively impractical for each and every antidumping duty order every time a scope inquiry is concluded. Applying the scope determination to unliquidated entries beginning with the "first POR" in which the issue was raised, provides all parties notice concerning the potential application of an affirmative final scope determination to entries covered by that POR and all subsequent PORs.
The Department agrees that the scope determination is effective back to the publication of the antidumping duty order. Clearly, subject merchandise was always subject merchandise. Indeed, the Department should have included this "new" subject merchandise beginning with the administrative review conducted immediately after the publication of the antidumping duty order. Nevertheless, the Department did not include this merchandise in its analyses prior to the scope inquiry and the petitioners failed to object to this omission in the prior segments of the proceeding either by raising the issue in the review or by requesting a scope inquiry earlier. Consequently, the petitioners are now foreclosed from raising the issue of scope coverage in the prior segments of the proceeding given they had every opportunity to raise the issue and failed to do so. The Department's application of the scope determination as far back as the beginning of the POR wherein the issue was first raised is required by the Court's holding in Timken and is the only means which guarantees all parties full participation in the administrative process.
V. RESULTS OF REMAND DETERMINATION
As a result of this redetermination, the application date of Final Scope Ruling is May 1, 1993, the beginning date of the 5th administrative review of AFBs from Japan.
Acting Assistant Secretary
for Import Administration
1. The Court of Appeals for the Federal Circuit (CAFC) in Koyo Seiko Co., Ltd., v. United States, No. 98-1050, -1051, 1998 U.S. App. LEXIS 17524 (Fed. Cir. July 28, 1998), affirmed that portion of the CIT's holding that a scope decision is "effective" back to the issuance of the antidumping duty order. Id. at 14-15. The CAFC did not address directly whether the application of a scope determination back to the publication of the antidumping duty order was warranted, but rather affirmed the CIT's holding with respect to the scope issue in its entirety. Id. at 15-16.
2. A subsequent administrative review (the 6th administrative review) of AFBs from Japan was the only other review open at the time the CRB scope issue was first raised.