The U.S. Supreme Court has declined to hear SKF's latest, and possibly final, challenge to be included in payouts made under the Continued Dumping and Subsidy Offset Act of 2000 (CDSOA).

reference : eBearing's dedicated CDSOA page
The CDSOA, now repealed but still throwing off payouts as it winds down, required that antidumping duties collected by Customs should be paid out to domestic manufacturers who supported the original complaints which led to the antidumping investigations and duties being applied. The U.S. bearing industry, and Timken/Torrington in particular, was far and away the largest beneficiary of CDSOA payouts.

The bearing industry's primary antidumping complaints made to the International Trade Commission date back to the late 1980's. Although they resulted in often significant antidumping duties on most imported ball and roller bearings, those duties went directly to the U.S. Treasury until 2001.

In 2000, passage of the CDSOA, changed the distribution of those collected duties, diverting them away from the general Treasury and awarding them directly to companies who filed and/or supported the antidumping duty complaints and cases.

The World Trade Organization and other trade bodies repeatedly found the CDSOA violated GATT and several other international trade laws, particularly those that prohibit direct government support for domestic industries. Eventually, in 2007, the CDSOA was repealed, but not before it had paid out several billion dollars to domestic manufacturers. The bearing industry has been the primary beneficiary, year after year.

SKF was among the U.S. bearing manufacturers who applied for COSOA distributions. SKF was denied in 2005, ruled ineligible to participate because the company had not supported the original antidumping complaints and investigations. Since 2005, SKF has been fighting to be recover a share of the hundreds of millions of dollars awarded to bearing manufacturers under the CDSOA.

In 2005, the Court of International Trade ruled in SKF's favor, allowing it to participate in CDSOA distribution of antidumping duties on bearings from Japan.

The basis for SKF's appeals has been the CDSOA's support requirement. SKF questioned whether the CDSOA's support requirement violates the constitution's first amendment right to free speech. By requiring that a company voice one particular opinion in order to be included in antidumping duty payouts, SKF argues the CDSOA puts the government in the position of financially rewarding companies for expressing a particular point of view and penalizing those who have a differing view ("viewpoint discrimination"). Not only that, but financially rewarding some at the expense of others puts the government in the position of making companies with the "right" point of view financially stronger -- potentially to the point of upsetting the free market's determination.

There are dozens of antidumping cases and more than $1.4 billion in CDSOA awards to "affected domestic producers" at stake.

The case went to the U.S. Supreme Court because the U.S. Court of Appeals for the Federal Circuit reversed the Court of International Trade's decision. The Appeals court upheld the CDSOA's requirement that a company must have expressed support for an antidumping duty action or investigation. In doing so, the Court applied the standard for non-public commercial speech, which is less rigorous than the First Amendment right of free speech.

Timken's Federal Circuit response is here: Timken response : 09-767

SKF's Reply Brief to Timken's response is here: SKF's Reply Brief : 09-767 to Timken's Response
Although the Federal Circuit decision went against SKF, that court was sharply divided. Their decision essentially avoided the free speech context, and instead found the CDSOA payouts are a kind of government-supported contractual reward for the participants' assistance in bringing the antidumping complaints which led to the duties. Four judges disagreed, led by the strongly-worded dissenting opinion of Judge Linn, in SKF's favor, making the Supreme Court appeal a certainty.

In its Supreme Court appeal, SKF said, "The Federal Circuit's decision violates important First Amendment principles established by a consistent line of this Court's decisions prohibiting government viewpoint discrimination."

SKF's Supreme Court filing (Petition for a Writ of Certiorari) is here:

No. 09-767 SKF USA Inc. vs. U.S. Customs and Border Protection, et al

Each session, hundreds, if not thousands, of appeals jockey for attention by the U.S. Supreme Court. The Court can decline to hear them for any number of reasons, and without explanation.

Even though the Supreme Court declined to hear SKF's appeal in this situation, there are a number of CDSOA-related complaints and appeals working their way through the Court of International Trade and other venues. Payouts in many cases have been stopped, and Customs has set aside funds for some companies with the prospect that some CDSOA appeals will eventually be successful.