Before Mayer, Chief Judge, Michel and Rader, Circuit Judges.
The opinion of the court was delivered by: Michel, Circuit Judge.
Appealed from: United States Court of International Trade Judge Nicholas Tsoucalas
This consolidated appeal concerns the Department of Commerce, International Trade Administration's ("Commerce's") fourth annual administrative review of the antidumping order on certain antifriction bearings and parts thereof (the "antifriction bearings"). See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, et al.; Final Results of Antidumping Duty Administrative Reviews, Partial Termination of Administrative Reviews, and Revocation in Part of Antidumping Duty Orders, 60 Fed. Reg. 10,900 (Dep't Commerce, 1995) ("Final Results"). On appeal, the Court of International Trade granted in part and denied in part various parties' motions for judgment on the agency record and remanded to Commerce for various redeterminations in accordance with its opinion. See NSK Ltd. v. United States, 969 F. Supp. 34 (Ct. Int'l Trade 1997) ("NSK I"). Commerce made the redeterminations as ordered on remand. See Final Results of Redetermination Pursuant to Court Remand, NSK Ltd., et al. v. United States, slip op. 97-74 (June 17, 1997), (Dep't Commerce Apr. 28, 1998) ("Remand Results"). The Remand Results were subsequently affirmed by the Court of International Trade in their entirety. See NSK Ltd. v. United States, No. 95-03-00239, slip op. 98-77 (Ct. Int'l Trade Jun. 16, 1998) ("NSK II").
Plaintiffs-Appellants Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. (together "Koyo Seiko"), Plaintiffs-Appellants NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corp., NTN Corporation, NTN Driveshaft, Inc., and NTN-Bower Corporation (collectively "NTN"), and Defendant-Cross Appellant The Torrington Company ("Torrington") now appeal and cross appeal to this court from various aspects of NSK I and NSK II. We affirm the judgment of the Court of International Trade with respect to NTN's appeal because we find no error, legal or factual, with regard to (i) Commerce's inclusion of certain sample sales and sales with a sporadic sales history as home market sales in its calculation of foreign market value ("FMV"); (ii) Commerce's exclusion of related party sales from the home market sales used in its calculation of FMV; (iii) Commerce's refusal to adjust FMV to take account of NTN's reported home market discounts; and (iv) Commerce's comparison of sales across different levels of trade in its calculation of FMV. However, with respect to the Court of International Trade's rejection of the home market warranty expense factor reported by Koyo Seiko and accepted by Commerce as a "circumstances of sale" adjustment to FMV, we reverse on the grounds that Commerce's acceptance of the adjustment was based upon a reasonable interpretation of the governing statute, accorded with applicable precedent, and its rejection by the court was therefore error. Finally, we affirm with respect to Torrington's cross appeal of the determination of the United States price of the antifriction bearings bought and resold by Defendants- Appellees Honda Motor Co., Ltd., American Honda Motor Co., Inc., Honda of America Mfg., Inc. and Honda Power Equipment Mfg., Inc (collectively, "Honda"). Like the Court of International Trade, we hold that Commerce reasonably interpreted the term "reseller" in the governing antidumping statute and that substantial evidence supports Commerce's determination that Honda constitutes such a "reseller" with regard to its sales of subject antifriction bearings.
The fourth annual administrative review of the antidumping order at issue covered antifriction bearings entered during the period May 1, 1992, through April 30, 1993. Although the review concerned imports from eight countries, the judgments on appeal here concern only imports from Japan. Because the review was initiated prior to January 1, 1995, the applicable antidumping law and regulations are those that were in effect prior to the changes made by the Uruguay Round Amendments Act, Pub. L. No. 103-465, 108 Stat. 4809 (1994) (the "URAA"). See URAA § 291(a)(2), (b); Cemex, S.A. v. United States, 133 F.3d 897, 899 n.1 (Fed. Cir. 1998). Under the then-applicable law, the antidumping duty calculated by Commerce in the Final Results and the Remand Results was imposed "in an amount equal to the amount by which the foreign market value exceeds the United States price for the merchandise." 19 U.S.C. § 1673 (1988). Broadly speaking, "[f]oreign market value is the price of the merchandise in the producer's home market or its export price to countries other than the United States." Thai Pineapple Pub. Co. v. United States, ___ F.3d ___, ___, 1999 WL 545263, at *3 (Fed. Cir. Jul. 28, 1999); see generally 19 U.S.C. § 1677b (1988). United States price ("USP") is the price at which the merchandise is purchased from the manufacturer or a reseller for exportation to the United States or the price at which the merchandise is sold or agreed to be sold in the United States for the account of the exporter. See 19 U.S.C. § 1677a (1988).
The parties appealed numerous aspects of the Final Results to the Court of International Trade. In NSK I, the Court of International Trade affirmed the Final Results, other than with respect to thirteen issues which were remanded back to Commerce for redetermination. See NSK I, 969 F. Supp. at 66. Commerce's subsequent Remand Results were then affirmed in their entirety by the Court of International Trade in NSK II.
In this court, NTN appeals with respect to four issues. Specifically, NTN argues (i) that substantial evidence does not support Commerce's inclusion in its FMV calculation of certain sales identified by NTN as sample sales and sporadic sales; (ii) that Commerce unreasonably excluded from its calculation of FMV certain of NTN's home market sales to related parties; (iii) that Commerce in its Remand Results erroneously refused to adjust its calculation of FMV for NTN's reported home market discount as direct selling expenses; and (iv) that Commerce's comparison of sales across different levels of trade in its calculation of FMV is not supported by substantial evidence.
Koyo Seiko appeals only with respect to one issue. In NSK I, the Court of International Trade held that Commerce's acceptance in the Final Results of Koyo Seiko's proposed circumstance of sale adjustment to FMV for its home market warranty expenses was erroneous due to the adjustment including warranty expenses on out-of-scope merchandise. Koyo Seiko argues that Commerce's interpretation of the statute providing for circumstance of sale adjustments to FMV was reasonable, comported with precedent, and thus should have been upheld in NSK I.
Finally, Torrington cross appeals with respect to Commerce's determination in its Final Results, as affirmed by the Court of International Trade in NSK I, that Honda constitutes a "reseller" as that term is used in the statute governing the calculation of USP and the accompanying definitional regulation. Torrington argues that Commerce unreasonably premised its determination that Honda was a "reseller" upon its finding that Honda's suppliers neither knew nor had reason to know that their sales to Honda would be exported to the United States.
"In reviewing a decision by the Court of International Trade, this court applies anew the statutory standard of review applied by that court to the agency's decision." Thai Pineapple, ___ F.3d at ___, 1999 WL 545265, at *3. Thus, like the Court of International Trade, we must examine the underlying findings of Commerce to determine if they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i) (1994). While we defer to Commerce's reasonable interpretation of the antidumping statutes if not contrary to an unambiguous legislative intent, see Timex V.I., Inc. v. United States, 157 F.3d 879, 881-82 (Fed. Cir. 1998) (citing Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43 & n.9 (1984)), and we accord substantial deference to Commerce's interpretations of its own regulations, see Torrington Co. v. United States, 156 F.3d 1361, 1363-64 (Fed. Cir. 1998), we review the Court of International Trade's interpretation of the antidumping laws de novo, see Cemex, 133 F.3d at 900.
A. The Alleged Sample and Sporadic Sales
Under 19 U.S.C. § 1677b(a)(1)(A) (1988), FMV is the price "at which such or similar merchandise is sold or, in the absence of sales, offered for sale in the principal markets of the country from which exported, . . . in the ordinary course of trade for home consumption" (emphasis added). As defined by statute:
"The term "ordinary course of trade" means the conditions and practices which, for a reasonable time prior to the exportation of the merchandise which is the subject of an investigation, have been normal in the trade under consideration with respect to merchandise of the same class or kind." 19 U.S.C. § 1677(15) (1988).
In the Final Results, Commerce included as home market sales in the ordinary course of trade certain sales identified by NTN as sample sales and sales with sporadic sales histories. Commerce reasoned that NTN's mere designation of certain sales as sample sales did not satisfy its burden of proving that the sales were made outside of the ordinary course of trade. See Final Results, 60 Fed. Reg. at 10,947. Similarly, Commerce rejected NTN's claim that certain sales of small quantities of products with sporadic sales histories were outside of the ordinary course of trade, explaining that "such sales histories are typical of certain types of products." Id.
In NSK I, the Court of International Trade remanded to Commerce for a redetermination in light of this court's ruling in NSK, Ltd. v. United States, 115 F.3d 965, 973-75 (Fed. Cir. 1997), that samples given without consideration do not constitute sales under the antidumping statute. In its Remand Results, Commerce explained that certain of the transactions labeled by NTN as "sample and other similar transfers" were, in fact, transfers in which monetary consideration was paid for the bearings. Consequently, the Court of International Trade amended its prior ruling in NSK I to order Commerce only to exclude those transactions for which NTN received no consideration. Commerce complied with this instruction on remand and its determinations were sustained by NSK II.
We are not persuaded that substantial evidence does not support Commerce's determination that NTN failed to meet its burden to prove that the alleged sample and sporadic sales were sales outside of the ordinary course of trade. The evidence submitted by NTN consisted of its records indicating sales of samples under the term "SAMPLEH" and sporadic sales under the term "NORDCH". The sales designated by NTN as sporadic were simply those in which there were seven or less transactions in the total review period with three or less units per transaction. No evidence was submitted that the process of ordering or shipping these alleged sample or sporadic sales differed from "ordinary" sales. Nor was evidence submitted that any of these sales required, for example, unique engineering specifications. Moreover, no evidence was submitted that the alleged sample sales for which monetary consideration was paid, differed in any material respect, other than by their designation as "SAMPLEH", from "ordinary" sales of the same merchandise for monetary consideration. Thus, given our deferential standard of review, we cannot say that Commerce's finding of a failure of proof was unsupported by substantial evidence.
B. The Related Party Sales
Under 19 U.S.C. § 1677b(a)(3) (1988), Commerce may base FMV on related party transactions. To implement this statute, Commerce promulgated a regulation requiring importers to demonstrate that their sales to related parties are comparable in price to ...