Mittal Steel Point Lisas Ltd. v. United States

United States Court of Appeals for the Federal Circuit
2007-1552

MITTAL STEEL POINT LISAS LIMITED
(formerly known as Caribbean Ispat Limited),

Plaintiff-Appellee,

v.

UNITED STATES,

Defendant-Appellee,

v.

GERDAU AMERISTEEL CORP.
and KEYSTONE CONSOLIDATED INDUSTRIES, INC.,

Defendants-Appellants.

Mark A. Moran, Steptoe & Johnson LLP, of Washington, DC, argued for plaintiff-
appellee. With him on the brief was Alexandra E.P. Baj. Of counsel were Jamie B.
Beaber and Susan R. Gihring.

James M. Lyons, General Counsel, Office of the General Counsel, United States
International Trade Commission, of Washington, DC, argued for defendant-appellee. With
him on the brief were Andrea C. Casson, Assistant General Counsel for Litigation, and
Marc A. Bernstein, Attorney.

Kathleen W. Cannon, Kelley Drye & Warren LLP, of Washington, DC, argued for
defendants-appellants. With her on the brief were Paul C. Rosenthal and R. Alan Luberda.

Appealed from: United States Court of International Trade

Senior Judge Thomas J. Aquilino, Jr.
 United States Court of Appeals for the Federal Circuit

2007-1552

MITTAL STEEL POINT LISAS LIMITED
(formerly known as Caribbean Ispat Limited),

Plaintiff-Appellee,

v.

UNITED STATES,

Defendant-Appellee,

v.

GERDAU AMERISTEEL CORP.
and KEYSTONE CONSOLIDATED INDUSTRIES, INC.,

Defendants-Appellants.

Appeal from the United States Court of International Trade in case no.
02-00756, Senior Judge Thomas J. Aquilino, Jr.

___________________________

DECIDED: September 18, 2008
___________________________

Before BRYSON and PROST, Circuit Judges, and ZAGEL, District Judge. *

BRYSON, Circuit Judge.

Gerdau Ameristeel Corp. and Keystone Consolidated Industries, Inc., (jointly,

“Gerdau”) appeal from the judgment of the Court of International Trade upholding a final

*
Honorable James B. Zagel, District Judge, United States District Court for
the Northern District of Illinois, sitting by designation.
determination by the International Trade Commission. The issue on appeal is whether,

on remand from a prior appeal to this court, the Commission was compelled by our

remand instructions and prior decisions of this court to conclude that less than fair value

(“LTFV”) imports of steel wire rod from Trinidad and Tobago did not cause a material

injury to a domestic industry. We hold that the Commission was not compelled to reach

that conclusion. We therefore vacate the judgment of the Court of International Trade

and remand the case to that court with instructions to remand the case to the

Commission.

I

This appeal arises out of an antidumping investigation that began in August 2001

when several domestic producers of steel wire rod filed antidumping petitions with the

Commission. In their petitions, the domestic producers alleged that LTFV imports of

steel wire rod from 12 countries, including the Republic of Trinidad and Tobago, had

caused material injury to the domestic industry. In its first final determination, the

Commission concluded that LTFV imports from the 12 countries had caused material

injury to the domestic industry. The Commission further determined that the evidence

supported a finding that LTFV imports from Trinidad and Tobago alone had caused

material injury to the domestic industry.

Mittal Steel Point Lisas Ltd., formerly known as Caribbean Ispat Ltd., appealed

the Commission’s final determination to the Court of International Trade. In that appeal,

Mittal challenged the Commission’s interpretation of a provision of the Caribbean Basin

Economic Recovery Act (“CBERA”), 19 U.S.C. § 1677(7)(G)(ii)(III). The Court of

International Trade upheld the Commission’s final determination, agreeing with the

2007-1552 2
Commission that CBERA prohibits the Commission from considering the effects of

LTFV imports from non-CBERA countries when assessing whether subject imports from

Trinidad and Tobago caused material injury to the domestic industry. Caribbean Ispat

Ltd. v. United States, 366 F. Supp. 2d 1300 (Ct. Int’l Trade 2005).

On appeal, we held that “the Court of International Trade erred by concluding

that the Commission was prohibited from considering the effects of LTFV imports from

non-CBERA countries when it assessed imports from Trinidad and Tobago.” Caribbean

Ispat Ltd. v. United States, 450 F.3d 1336, 1341 (Fed. Cir. 2006). We therefore

remanded the case for further proceedings in light of that holding. In addition, we

directed the Commission to take into account our then-recent decision in Bratsk

Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006). In Bratsk, this

court held that “whenever the antidumping investigation is centered on a commodity

product, and price competitive non-subject imports are a significant factor in the

market,” the Commission is required “to explain why—notwithstanding the presence and

significance of the non-subject imports—it concluded that the subject imports caused

material injury to the domestic industry.” Id. at 1375.

Based on the decision in Bratsk, we instructed the Commission “to make a

specific causation determination and in that connection to directly address whether

[other LTFV imports and/or fairly traded imports] would have replaced [Trinidad and

Tobago’s] imports without any beneficial effect on domestic producers.” Caribbean

Ispat, 450 F.3d at 1341 (quoting Bratsk, 444 F.3d at 1375).

On remand, the Commission first considered the statutorily mandated present

material injury factors specified in 19 U.S.C. § 1677(7)(B)(i):

2007-1552 3
 (I) the volume of imports of the subject merchandise,

(II) the effect of imports of that merchandise on prices in the United States
for domestic like products, and

(III) the impact of imports of such merchandise on domestic producers of
domestic like products, but only in the context of production operations
within the United States . . . .

The Commission found that each of those factors favored a finding of material injury by

reason of subject imports from Trinidad and Tobago. In its analysis of the price effects

and the impact of Trinidadian imports, the Commission found that the injury to the

domestic industry could not be entirely explained by the market presence of non-subject

imports and non-Trinidadian subject imports. The Commission therefore concluded that

subject imports from Trinidad and Tobago had caused material injury to the domestic

industry “based on the significant and increasing volume and market share of subject

imports from Trinidad and Tobago in a shrinking market, significant price underselling

and significant price suppression by these imports, and declining industry indicators

from 1999 to 2001.”

With respect to the question whether the domestic industry was threatened with

material injury in the foreseeable future, the Commission found that Mittal had the ability

to increase its exports to the U.S.; that the subject imports from Trinidad and Tobago

had undersold the prices for the domestic like product and were likely to continue to

have a significant suppressing effect on domestic prices; and that the subject imports

were likely to have a negative effect on the domestic industry’s production and

development efforts. For those reasons, the Commission found “a likelihood of

continued imminent injury to the domestic industry from subject imports from Trinidad

and Tobago.” The Commission therefore concluded that “application of the statutorily-

2007-1552 4
mandated threat factors, as well as of the statutorily-mandated present material injury

factors each would have led us to an affirmative determination.”

Despite reaching that conclusion, the Commission stated that it could not issue

an affirmative determination of material injury by reason of the subject imports because

of this court’s remand instructions relating to the requirements of Bratsk. First, the

Commission stated that our remand instructions seemed to require the Commission to

treat all steel wire imports as fungible commodity products. Next, the Commission

determined that the record supported a finding that non-Trinidadian imports were

present in significant quantities and were a significant factor in the U.S. market. The

Commission then turned to the question whether non-Trinidadian imports would have

replaced Trinidadian imports and, if so, whether the absence of imports from Trinidad

and Tobago would have had any beneficial effect on domestic producers during the

period of investigation.

In addressing that issue, the Commission first concluded that the record

supported a determination that producers in countries other than Trinidad and Tobago

had sufficient capacity that they “could have, if so inclined, exported sufficient volumes

to the U.S. during the [period of investigation] to fully replace subject imports from

Trinidad and Tobago.” While the Commission found that non-Trinidadian imports had

the capacity to replace imports from Trinidad and Tobago, however, it stated that it was

unable to conclude that those non-Trinidadian imports would have replaced subject

Trinidanian imports. The Commission explained that it was unable to make that finding

because of the lack of evidence in the record on that issue. Nonetheless, the

Commission invoked a presumption that the subject imports would have been replaced.

2007-1552 5
It applied that presumption based on its perception that this court had required the

Commission to make a negative determination unless evidence in the record supported

the conclusion that “non-subject imports would not have replaced subject imports or if

they would have replaced them, would not have resulted in a benefit to the domestic

industry.” The Commission added that this court “appears to have created a

presumption under the Bratsk replacement/benefit test that if a foreign producer could

‘replace’ subject imports, it would.”

The Commission next turned to the question whether there would have been any

benefit to the domestic industry if subject imports had been absent from the market.

The Commission found that the “low prices or average unit values at which many [non-

Trinidadian] imports entered the United States” weighed against a finding that the

removal of the Trinidadian imports would have resulted in a benefit to the domestic

industry. The Commission therefore determined that the domestic industry was not

materially injured by reason of the subject imports. In so doing, however, the

Commission made clear that it was reaching that conclusion only because it believed it

was compelled to by the analysis required under Bratsk. The Commission stated that

“we believe the Federal Circuit’s decision in Bratsk and its remand order in this case

compel us to reach a negative determination in this investigation, even though we

believe an affirmative determination is consistent with the statute and supported by the

factual record.” Finally, the Commission noted that its conclusion with respect to the

causation analysis applied equally to its analysis of whether there was a threat of

material injury by reason of subject imports from Trinidad and Tobago.

2007-1552 6
 Commissioners Koplan and Lane dissented from the Commission’s analysis of

Bratsk. In their view, the Commission majority had erred in considering the steel wire

rod under investigation to be a commodity product. For that reason, they stated that

they would have issued an affirmative determination.

On appeal from the Commission’s negative determination, the Court of

International Trade affirmed. The court ruled that the Commission had conducted the

remand proceedings as this court directed and that the court could not agree with the

appellants “that the agency record, such as it still is, does not support [the

Commission’s] specific causation determination.” Mittal Steel Point Lisas Ltd. v. United

States, 495 F. Supp. 2d 1374, 1380 (Ct. Int’l Trade 2007).

II

Gerdau challenges the Commission’s negative determination on a number of

grounds. First, Gerdau argues that the “replacement/benefit test” applied by the

Commission, based on its understanding of this court’s decision in Bratsk, lacks

statutory support and therefore is not in accordance with law. Second, Gerdau

challenges the Commission’s conclusion that this court made a factual finding with

respect to the interchangeability of the steel wire imports at issue in the investigation.

Third, Gerdau argues that the Commission erred in applying a rebuttable presumption

that imports from Trinidad and Tobago would have been replaced by imports from

countries having the capacity to replace the Trinidadian imports. Finally, Gerdau argues

that the Commission misapplied the “replacement/benefit test” in connection with its

threat determination.

2007-1552 7
 The Commission responds that, although it regards this court’s remand

instructions as reflecting an incorrect interpretation of the antidumping statute, its

negative determination should be upheld because it faithfully applied the remand

instructions in this case and the more general directions provided by this court’s

decision in Bratsk. Mittal supports the Commission’s negative determination, arguing

that the Commission correctly applied the principles of Bratsk and that those principles

are not in conflict with the antidumping statute.

The Commission begins its argument by setting forth its contention that, apart

from requiring that the Commission consider the three factors specified in section

1677(7)(B)(i), the antidumping statute does not require the Commission to perform any

further analysis when determining whether a material injury was “by reason of” subject

imports. In addition to those three “mandatory” factors—the volume of subject imports,

the effect of those imports on prices in the United States, and the impact of those

imports on domestic producers—section 1677(7)(B)(ii) provides that the Commission

“may consider such other economic factors as are relevant to the determination

regarding whether there is material injury by reason of imports.” Because the language

of section 1677(7)(B)(ii) is permissive, the Commission argues that it has discretion to

go beyond the three factors set forth in section 1677(7)(B)(i), but it is not required to do

so.

While the Commission is correct that section 1677(7)(B)(ii) affords it discretion to

consider factors other than the three factors set forth in section 1677(7)(B)(i), that

discretion is not unbounded, but is subject to general principles of administrative law. In

particular, the Commission would abuse its discretion if, by ignoring a relevant

2007-1552 8
economic factor that it could consider under section 1677(7)(B)(ii), the Commission

“entirely failed to consider an important aspect of the problem.” Motor Vehicle Mfrs.

Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); see Timken U.S. Corp.

v. United States, 421 F.3d 1350, 1355-56 (Fed. Cir. 2005) (applying that principle to an

antidumping determination and citing other cases applying the same principle in the

same context). In making its determination as to whether the harm to the domestic

injury occurred “by reason of” the LTFV imports, the Commission was required to

“examine the relevant data and articulate a satisfactory explanation for its action.”

Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43; see also 19 U.S.C. § 1677(7)(B) (“In the

notification required under section 1671d(d) or 1673d(d) of this title, as the case may

be, the Commission shall explain its analysis of each factor considered under clause (i),

and identify each factor considered under clause (ii) and explain in full its relevance to

the determination.”).

While the Commission may not enter an affirmative determination unless it finds

that a domestic industry is materially injured “by reason of” subject imports, the

Commission is not required to follow a single methodology for making that

determination. In United States Steel Group v. United States, 96 F.3d 1352 (Fed. Cir.

1996), this court emphasized the Commission’s broad discretion with respect to its

choice of methodology. The court stated:

This court has no independent authority to tell the Commission how to do
its job. We can only direct the Commission to follow the dictates of its
statutory mandate. So long as the Commission’s analysis does not violate
any statute and is not otherwise arbitrary and capricious, the Commission
may perform its duties in the way it believes most suitable.

Id. at 1362; see also S. Rep. No. 96-249, at 75 (1979), as reprinted in 1979

U.S.C.C.A.N. 381, 461 (“The determination of the ITC with respect to causation is,

2007-1552 9
under current law, and will be, under [19 U.S.C. § 1673d], complex and difficult, and is a

matter for the judgment of the ITC.”).

In reviewing an affirmative injury determination for substantial evidence, this

court requires evidence in the record “to show that the harm occurred ‘by reason of’ the

LTFV imports, not by reason of a minimal or tangential contribution to material harm

caused by LTFV goods.” Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed.

Cir. 1997). In analyzing the issue of causation, the Commission has broad authority to

consider “any relevant factors.” Allegheny Ludlum Corp. v. United States, 287 F.3d

1365, 1376 (Fed. Cir. 2002). Our review of the Commission’s causation analysis in

antidumping cases is therefore limited to whether the Commission complied with certain

minimum requirements imposed by statutory provisions and principles of administrative

law.

We applied the principles described above in our decisions in Gerald Metals and

Bratsk. In Gerald Metals, we reviewed an affirmative determination by the Commission,

subsequently sustained by the Court of International Trade, that Russian, Ukrainian,

and Chinese magnesium imports caused material injury to the domestic industry. 132

F.3d at 716. Gerald Metals appealed that determination with respect to LTFV Ukrainian

imports. On appeal, this court observed that the record supported an inference that

fairly traded Russian imports were substitutes for the subject Ukrainian LTFV imports.

Id. at 720-21. We concluded that the Commission “fail[ed] to incorporate the undisputed

facts about fairly-traded imports into its analysis of the harm caused by reason of the

cumulated LTFV imports.” Id. at 720. In its review, the Court of International Trade had

found no evidence in the record to support Gerald Metals’ argument that “fairly-traded

2007-1552 10
Russian imports would have replaced all or the greater part of the subject imports.” Id.

at 721. After reviewing the record, however, we held that we could not affirm the

decision of the Court of International Trade without further explanation of whether fairly

traded Russian imports would have replaced the subject imports. Id. Because the

record on appeal did not support the conclusion that LTFV imports “were the reason for

the harmful effects to the domestic magnesium industry,” we remanded the case to the

Court of International Trade. Id. at 722-23. Noting that the statute “requires adequate

evidence to show that the harm [to the domestic industry] occurred ‘by reason of’ the

LTFV imports, not by reason of a minimal or tangential contribution to material harm

caused by LTFV goods,” we held that the failure of the Court of International Trade “to

consider properly the presence of fairly-traded Russian imports” rendered the court’s

decision erroneous. Id.

In Bratsk, we held that the Commission had failed to consider an important

aspect of the causation analysis under Gerald Metals when it did not address whether

non-subject imports would have replaced the subject imports at issue—silicon metal

imports from Russia. 444 F.3d at 1375. We acknowledged in Bratsk that “there may

[have been] support for the Commission’s ultimate determination in the record,” but we

found that the Commission did not provide a satisfactory explanation for its affirmative

determination. Id. Instead of considering whether non-subject imports would have

replaced the subject imports, the Commission had limited Gerald Metals to its “unique

facts.” Id. We therefore remanded the case for the Commission to include in its

causation analysis a determination as to whether non-subject imports would have

replaced subject imports without any benefit to the domestic industry. Id. at 1376.

2007-1552 11
 In this case, as in Bratsk, the Commission’s first final determination “did not

specifically address whether Trinidad and Tobago’s imports could or would be replaced

by other imports so that the domestic industry would not benefit from the removal of

Trinidad and Tobago’s imports from the U.S. market.” Caribbean Ispat, 450 F.3d at

1341. On remand, the Commission analyzed whether other imports would have

replaced subject imports from Trinidad and Tobago. At the conclusion of that analysis,

the Commission issued a negative determination as to whether the domestic industry

had been injured by reason of the subject imports but, as noted, the Commission made

clear that it reached that conclusion only because it felt compelled to do so by the terms

of this court’s remand instructions and the analytical approach required by Bratsk.

We think the Commission interpreted this court’s remand instructions and the

decision in Bratsk too rigidly, in three respects. First, the Commission viewed our

remand instructions as foreclosing it from making a finding as to one of the “triggering

factors” for applying the Bratsk analysis—the question as to whether the merchandise

subject to investigation was a commodity product. Second, the Commission interpreted

the Bratsk analysis as looking to whether an antidumping order would result in a benefit

to the domestic industry by eliminating the subject imports from the market in the future,

rather than looking to whether the hypothetical removal of the LTFV subject imports

would have resulted in their replacement by non-subject or non-LTFV imports with no

resulting benefit to the domestic industry. Third, the Commission interpreted Bratsk as

adopting a rebuttable presumption that subject imports would be replaced by non-

subject imports and, absent an affirmative showing to the contrary, requiring the

Commission to make a negative determination. We now address each of these issues.

2007-1552 12
 A

In the remand proceedings, the Commission found that the products at issue

comprise “a continuum of at least 11 major categories of products, ranging from low

carbon wire rod such as industrial wire rod used for nails and coat hangers, to medium

to high carbon wire rod.” Notwithstanding that finding, the Commission concluded that

our decision in the prior appeal in this case had already resolved the issue of fungibility

and foreclosed the Commission from making a contrary finding that the products were

not fungible. The Commission stated that our opinion “appear[ed] to assume that wire

rod is a ‘commodity’ product as defined in Bratsk, since it stated that the task remaining

before the Commission is to conduct the replacement/benefit test, not to analyze

whether the threshold factors in Bratsk have been met.”

Our prior decision did not purport to make a factual finding that all steel wire rod

imports at issue in the Commission’s investigation were fungible and therefore should

be treated as commodity products for purposes of the Bratsk analysis. Rather, we

simply observed that “the Commission found a ‘high level of fungibility between subject

imports from Trinidad and Tobago and the domestic product, and between subject

imports from Trinidad and Tobago and imports from each of the other subject

countries.’” Caribbean Ispat Ltd., 450 F.3d at 1341 (quoting the final determination of

the Commission). While we may have assumed, based on the quoted language from

the Commission’s earlier determination, that the Commission’s finding with respect to

the commodity nature of the products would likely be the same as its finding with

respect to cumulation, the Commission has explained in some detail why the two are

not necessarily the same. If we were wrong in our assumption as to what the

2007-1552 13
Commission’s finding would be with respect to the commodity issue, it was the

Commission’s prerogative to say so.

The Commission, and not this court, is the finder of facts in antidumping

investigations, and it is up to the Commission to make findings of fact on issues such as

fungibility. Appellate courts do not make factual findings; they review them. See Icicle

Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986) (appellate court may set aside

findings of fact it determines to be clearly erroneous and may reverse incorrect

judgments of law based on proper factual findings, but “it should not simply [make]

factual findings on its own”); Middleton v. Dep’t of Def., 185 F.3d 1374, 1383 (Fed. Cir.

1999) (“as an appellate court, we may not find facts”); First Interstate Bank of Billings v.

United States, 61 F.3d 876, 882 (Fed. Cir. 1995) (“It would be a distortion of our role to

draw conclusions about the facts . . . rather than having the trial court make its own

findings in light of the [legal] standard that we have endorsed.”) (citing Icicle Seafoods,

supra). For purposes of further proceedings in this case, the Commission should regard

the issue of fungibility as an open factual issue for it to resolve.

B

In its final determination, the Commission interpreted Bratsk to require it “to

determine whether non-subject imports would fill the void created by the ‘elimination’ of

subject imports despite the fact that there may be no such void created by an order.”

The Commission criticized that requirement on the ground that it “misconstrues the

purpose of the statute, which is not to bar subject imports from the U.S. market, but is

meant instead to ‘level[] competitive conditions’ by imposing a duty on subject imports

and thus enabling the industry to compete against fairly traded imports.” The

2007-1552 14
Commission added that the Bratsk analysis is contrary to the principle that “under the

statute, it is not required, nor is it permitted, to reach a negative determination based on

the likely effectiveness of an order. . . . The statute contemplates that not all orders will

be effective and does not ask the ITC to perform an additional inquiry to predict the

future effectiveness of import relief.”

In its brief on this appeal, the Commission echoes the same concerns. It argues

that the antidumping statute “does not state that imposition of antidumping or

countervailing duty is appropriate only if the Commission establishes in its injury

determination that such relief will be effective.” The Commission adds that the statute

“recognizes that not all orders will be effective and does not provide for the Commission

to perform an additional inquiry to predict the future effectiveness of import relief.”

Those objections are based on what appears to be a misapprehension of the

purpose of the analysis discussed in Bratsk. The comments reveal that the

Commission views Bratsk as holding that an antidumping duty order may be entered

only if the Commission can determine that the order would be “effective” in the future by

causing the elimination of the subject imports from the market, which imports would not

then be replaced by non-subject imports.

That characterization misses the point of Bratsk. The decision in Bratsk was not

addressed to the potential effectiveness of any possible remedial order. Instead, it was

directed to determining the cause of the injury already suffered by the domestic

industry.

2007-1552 15
 An important element of the causation inquiry—not necessarily dispositive, but

important—is whether the subject imports are the “but for” cause of the injury to the

domestic industry. As the Supreme Court has explained,

But for causation is a hypothetical construct. In determining whether a
particular factor was a but-for cause of a given event, we begin by
assuming that that factor was present at the time of the event, and then
ask whether even if that factor had been absent, the event nevertheless
would have transpired in the same way.

Price Waterhouse v. Hopkins, 490 U.S. 228, 240 (1989).

In this context, that principle requires the finder of fact to ask whether conditions

would have been different for the domestic industry in the absence of dumping. Thus,

Bratsk (like Gerald Metals) directs that in cases involving commodity products in which

non-LTFV imported goods are present in the market, the Commission must give

consideration to the issue of “but for” causation by considering whether the domestic

industry would have been better off if the dumped goods had been absent from the

market. That inquiry is not concerned with whether an antidumping order would actually

lead to the elimination of those goods from the market in the future or whether those

goods would be replaced by goods from other sources. Rather, the inquiry is a

hypothetical one that sheds light on whether the injury to the domestic industry can

reasonably be attributed to the subject imports. The focus of the inquiry is on the cause

of injury in the past, not the prospect of effectiveness in the future.

The Commission in its brief argues that the inquiry required by Bratsk is at odds

with the Commission’s obligations under the antidumping laws, but we regard the

inquiry into “but for” causation as a proper part of the Commission’s responsibility to

determine whether the injury to the domestic industry is “by reason of” the subject

2007-1552 16
imports. Moreover, that inquiry is consistent with the characterization of the

Commission’s obligations in the Statement of Administrative Action (“SAA”) that

accompanied the 1994 Uruguay Round Agreements Act. The SAA states that the

Commission must examine all relevant evidence, including any known factors, other

than the dumped or subsidized imports, that may be injuring the domestic industry, and

that the Commission must examine those other factors “to ensure that it is not

attributing injury from other sources to the subject imports.” The Uruguay Round

Agreements Act: Statement of Administrative Action, H.R. Doc. No. 103-316 (Vol. I), at

851-52 (1994), as reprinted in 1994 U.S.C.C.A.N. 4040, 4184-85; see also S. Rep. No.

96-249, at 75 (1979), as reprinted in 1979 U.S.C.C.A.N. 381, 461 (“in examining the

overall injury to a domestic industry, the ITC will consider information which indicates

that harm is caused by factors other than less-than-fair value imports”).

C

In its remand determination, the Commission stated that it interpreted our

decision in Bratsk to require the Commission, when applying the “replacement/benefit”

test, to apply “a presumption in favor of finding replacement” whenever the “triggering

factors” are present, i.e., whenever the antidumping investigation is directed to a

commodity product and price competitive non-subject imports are a significant factor in

the market. The Commission explained that because, as a practical matter, the

Commission and domestic producers “will seldom have information to rebut” that

presumption, the effect of the replacement/benefit test “seems to require the agency to

render a negative determination, if the triggering factors are satisfied, unless the record

contains substantial evidence that either non-subject imports would not replace the

2007-1552 17
subject imports or that such replacement would nonetheless benefit the domestic

industry.”

Applying that approach in light of the record in this case, the Commission first

found that evidence supported the conclusion that non-subject countries and non-

CBERA subject countries had sufficient capacity during the period of investigation to

fully replace the subject imports from Trinidad and Tobago. The Commission then

concluded that although there was no evidence before it as to whether non-Trinidadian

imports actually would have replaced the subject Trinidadian imports, it had to find that

there would have been replacement (and no benefit to the domestic industry) based on

the “presumption in favor of replacement” purportedly required by Bratsk. For that

reason, the Commission felt that it was required to find that the injury to the domestic

industry was not “by reason of” subject imports.

Contrary to the Commission’s interpretation, we do not regard the decision in

Bratsk as requiring the Commission to presume that producers of non-subject goods

would have replaced the subject goods if the subject goods had been removed from the

market. Although we stated there, and reaffirm here, that the Commission has the

responsibility to consider the causal relation between the subject imports and the injury

to the domestic industry, that responsibility does not translate into a presumption of

replacement without benefit to the domestic industry.

In the portion of the Bratsk opinion that the Commission regards as having

created a presumption of replacement, the court was addressing one of the arguments

made by the Commission, namely, that the subject importer had “not demonstrated” that

“non-subject imports were well positioned to completely fill any void left by the

2007-1552 18
withdrawal of subject imports from the market.” 444 F.3d at 1376 (quoting the

Commission’s brief). The court responded to that argument by pointing out that it was

the Commission’s responsibility to make a finding on the issue of causation, and that it

was not the subject importer’s burden to demonstrate that the subject imports did not

cause the injury to the domestic industry. Id. The court’s point was that the

Commission could not acquit its responsibility to address the issue of causation simply

by pointing to the subject importer’s failure to offer evidence to negate causation. See

S. Rep. No. 96-249, at 75 (1979), as reprinted in 1979 U.S.C.C.A.N. 381, 461

(Commission must consider information indicating that harm is caused by factors other

than LTFV imports, but “the petitioner will not be required to bear the burden of proving

the negative.”).

To say that an affirmative determination must be based on evidence that the

injury to the domestic industry is “by reason of” subject imports does not require the

Commission to address the causation issue in any particular way, or to apply a

presumption that non-subject producers would have replaced the subject imports if the

subject imports had been removed from the market. 1 The Commission is simply

1
Mittal acknowledges in its brief that the court in Bratsk “did not create a
rebuttable presumption that if replacement could occur it would occur. Rather, it merely
enforced the Commission’s obligation to satisfy the ‘by reason of’ causation standard
with a reasoned explanation, supported by substantial evidence.” Nonetheless, Mittal
contends that the record contains sufficient evidence to affirm the Commission’s
conclusion that other imports would not have replaced the subject imports from Trinidad
and Tobago during the period of investigation. Whether or not that is the case, the
Commission did not base its determination on a finding with respect to the strength of
the evidence that other imports would not have replaced subject imports, and we
therefore cannot affirm the agency’s decision on that ground. See Sec. & Exch.
Comm’n v. Chenery, 332 U.S. 194, 196 (1947).

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required to give full consideration to the causation issue and to provide a meaningful

explanation of its conclusions. See Bratsk, 444 F.3d at 1376 (“While there may be

support for the Commission’s ultimate determination of material injury in the record

here, we find that the Commission did not sufficiently explain its decision in this

regard.”).

What Bratsk held is that “where commodity products are at issue and fairly

traded, price competitive, non-subject imports are in the market,” the Commission would

not fulfill its obligation to consider an important aspect of the problem if it failed to

consider whether non-subject or non-LTFV imports would have replaced LTFV subject

imports during the period of investigation without a continuing benefit to the domestic

industry. 444 F.3d at 1369. Under those circumstances, Bratsk requires the

Commission to consider whether replacement of the LTFV subject imports might have

occurred during the period of investigation, and it requires the Commission to provide

an explanation of its conclusion with respect to that factor. The Commission must

further explain whether the record provides support for a finding that the domestic

industry was materially injured “by reason of” the LTFV subject imports after it has

considered the analysis described in Gerald Metals and Bratsk along with the statutorily

mandated factors and any other relevant economic factors that the Commission elects

to consider under section 1677(7)(B)(ii). 444 F.3d at 1373 & n.3. Bratsk did not read

into the antidumping statute a Procrustean formula for determining whether a domestic

injury was “by reason of” subject imports. It simply required the Commission to consider

the “but for” causation analysis in fulfilling its statutory duty to determine whether the

subject imports were a substantial factor in the injury to the domestic industry, as

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opposed to a merely “incidental, tangential, or trivial” factor. Nippon Steel Group v. Int’l

Trade Comm’n, 345 F.3d 1379, 1381 (Fed. Cir. 2003). 2

We therefore vacate the judgment of the Court of International Trade and remand

with directions for that court to remand the case to the Commission for further

consideration of the material injury issue in light of this opinion.

D

In its decision, the Commission noted that our opinion in Bratsk did not mention

whether replacement of LTFV subject imports by nondumped imports is a factor that

should be considered in threat determinations. Nonetheless, the Commission declined

to issue an affirmative determination as to the threat of material injury to the domestic

industry based on the presumption that nondumped imports would have replaced the

LTFV subject imports from Trinidad and Tobago. Because that analysis was not

required by our decision in Bratsk and our prior decision in this case for the reasons

discussed, we vacate the judgment of the Court of International Trade and remand for

further proceedings with respect to the threat of material injury as well.

In concluding that the Commission committed legal error in the remand

proceedings in this case, we intend no criticism of the Commission’s effort to comply

2
Commissioners Pearson and Okun have noted that interpreting Bratsk in that
manner, i.e., as “a reminder that the Commission, before it makes an affirmative
determination, must satisfy itself that it has not attributed material injury to factors other
than subject imports,” is consistent with the Commission’s obligation to “analyze the
effects of the unfairly traded imports and other relevant factors in a way that enables the
Commission to conclude that it has not attributed the effects of other factors to the
subject imports.” Separate and Additional Views of Chairman Daniel R. Pearson and
Commissioner Deanna Tanner Okun Concerning Bratsk Aluminum v. United States, in
Sodium Hexametaphosphate from China, Inv. No. 731-TA-1110 (Preliminary), USITC
Pub. 3912 (Apr. 2007), at 21.

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with this court’s previous directions. Indeed, the error we have found flows largely from

the Commission’s effort to proceed with scrupulous attention to the terms of this court’s

remand instructions. The problem may stem from a lack of sufficient clarity in our prior

opinion, which we hope has been rectified in this one.

Each party shall bear its own costs for this appeal.

VACATED and REMANDED.

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