S|ip Op. 08-80
UN|TED STATES COURT OF INTERNAT|ONAL TRADE
CONSOL|DATED F|BERS, |NC., STE|N FlBERS,
LTD., BERNET |NTERNAT|ONAL TRAD|NG,
LLC, AND BI\/|T COl\/lMODlTY CORPGRAT|ON, Public Version
F’|aintiffs, Before: Le0 M. Gordon, Judge
Court No. 06-00‘|34
UN|TED STATES,
Defendant.
OP|N|ON
[Plaintiffs’ motion forjudgment on the agency record denied; Commission’s sunset review
results sustained.]
Dated: July 22, 2008
deKieffer& Horqan (GregorvS. l\/leneoaz, |\/|erritt R. Blakeslee, J. Kevin Horqan)for
Plaintiffs Consolidated Fibers, |nc., Stein Fibers, Ltd., Bernet international Trading, LLC,
and BI\/|T Commodity Corporation_
James M. Lyons, Genera| Counsel, Neal J. Reynolds, Assistant General Counsel
for Litigation, Karl von Schriltz, Attorney-Advisor, United States international Trade
Commission, for Defendant.
Kellev Drve Co||ier Shannon (Paul C_ Rosenthal, Kathleen W. Cannon, David C.
Smith Jr_) for Defendant-intervenors Dak Fibers, LLC, lnvista S.a.r.l., and Wellman, lnc.
Gordon, Judge: Plaintiffs move for judgment on the agency record pursuant to
USClT R. 56.2, challenging the final results of the United States international Trade
Commission’s ("Commission") five-year reviews of the antidumping duty orders on
polyester staple fiber ("PSF") from Korea and Taiwan. See Certain Po|vester Stap|e Fiber
from Korea and Taiwan, lnv. Nos. 731-TA-825 and 826 (Final), US|TC Pub. 3843 (l\/lar.
Court No. 06-00134 Page 2
2006) ("Sunset Reviews").‘ The court has jurisdiction to review Plaintiffs’ claims pursuant
to Section 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C.
§ 1516a(a)(2)(B)(iii) (2000)2 and 28 U.S.C. § 1581(c) (2000). For the reasons set forth
below, the court sustains the Sunset Reviews and denies Plaintiffs’ motion forjudgment
on the agency record.
|. Standard of Review
in a sunset review the Commission determines whether revocation of an
antidumping duty order would likely lead to continuation or recurrence of material injury
within a reasonably foreseeable time_ 19 U.S.C. § 1675a(a)(1). Specifically, the
Commission "consider[s] the likely volume, price effect, and impact of imports" on the
subject merchandise if the order is revoked l_d__ Additionally, the Commission takes into
account its prior injury determinations, whether any improvement in the state ofthe industry
is related to the order, whether the industry is vulnerable to material injury if the order is
revoked, and any findings by Commerce regarding duty absorption pursuant to 19 U.S.C.
§ 1675(a)(4). l_d__
When reviewing the final results of the Commission’s sunset reviews under 28
U.S.C. § 1581(c), the Court of international Trade sustains the Commission’s
determinations, findings, or conclusions unless they are "unsupported by substantial
evidence on the reoord, or otherwise not in accordance with law." 19 U.S.C.
‘ The public views of the Sunset Reviews are cited as "Pub. Views" and the
confidential views are cited as "Conf. Views."
2 Further citations to the Tariff Act of 1930 are to the relevant provisions of Title 19
of the U.S. Code, 2000 edition.
Court No. 06-00134 Page 3
§ 1516a(b)(1)(B)(i). i\/lore specifica|ly, when reviewing whether the Commission’s actions
are unsupported by substantial evidence, the court assesses whether the agency actions
are reasonable given the record as a whole. NlDDOn Steel Corp. v. United States, 458 F.3d
1345, 1350-51 (Fed. Cir. 2006).
|l. Discussion
in this action Plaintiffs specifically challenge: (1) the Commission’s "refusai to
conduct a thorough and impartial investigation" ofthe scope and effect of an alleged price-
fixing conspiracy amongst the domestic industry, and of its implications for the
Commission’s original injury determinations, Pl.s’ i\/lem. in Supp. of l\/|ot. for J. on the
Agency R. ("Pi.s’ |Viem.") at 6-18; (2) the Commission’s alleged failure to review the original
injury determinations as part of the analysis ofthe Sunset Reviews, l_d_. at 8-9 & 18; (3) the
Commission’s finding that revocation of the orders would likely result in a significant
increase in the volume of imports of the subject merchandise, i_cL at 19-27; (4) the
Commission’s finding that revocation of the orders would result in adverse price effects,
including undersel|ing and price depression or suppression by the subject imports, ld_. at
27-29; (5) the Commission’s alleged failure to examine the causation between future
subject imports and continuation of material injury upon revocation, ld_. at 30; and (6) the
Commission’s finding that imports of the subject merchandise would likely result in a
significant adverse impact on the domestic industry, § at 30-31.
1. The integrity of the Sunset Reviews
Plaintiffs question the integrity ofthe Sunset Reviews, alleging that certain domestic
producers conspired to fix prices and allocate customers for the domestic like product
Court No. 06-00134 Page 4
during a period overlapping parts of the original investigations and the Sunset Reviews.$
After examining Plaintiffs’ allegations, the Commission determined that "any conspiracy
[amongst the domestic industry] was primarily limited to nonsubject PSF, and that record
evidence does not support the proposition that any conspiracy extended to certain PSF."
Pub. Views at 22. The Commission concluded that the conspiracy did not affect the record
ofthe Sunset Reviews and declined to discount pricing data and other information from the
original investigations orthe five year period following the publication ofthe orders ("period
of review" or "POR"). Pub. Views at 18, 22-23.
Plaintiffs argue the Commission failed to conduct a reasonable inquiry into their
allegations of price-fixing by not (1) drafting questionnaires that would elicit meaningful
information regarding the effects of the conspiracy, (2) subpoenaing documents from the
pending civil litigation regarding the conspiracy, (3) accepting two letter submissions
detailing evidence ofthe conspiracy until late in the Sunset Reviews, and (4) extending the
Sunset Reviews by 90 days to further gather and consider evidence regarding the
conspiracy, P|.s’ Mem at 6-19.
The Commission maintains that it collected evidence relating to Plaintiffs’
allegations, including purchasers' responses to the Commission's questions about the
conspiracy, 1,823 pages of evidence submitted by the parties, hearing testimony, and
certain information gathered from a confidential source connected with the civil antitrust
3 The court already heard Plaintiffs’ separate claim involving the Commission’s
refusal to reconsider the original injury determinations in light of new evidence of an
alleged antitrust conspiracy involving some members of the domestic industry.
Consolidated Fibers. lnc. v. United States, 32 ClT _, 535 F. Supp. 2d 1345 (2008)
(" ").
Court No. 06-00134 Page 5
litigation. Def».’s Resp. to Pl.s’l i\/lot_ for J. on the Agency R. ("Def.'s Resp.") at 20-23. The
Commission contends that it had an ample evidentiary foundation on which to assess
Plaintiffs’ antitrust conspiracy allegations. ld_. The court agrees.
The court previously heard Plaintiffs’ arguments about the sufficiency of the
Commission’s inquiry into the alleged antitrust conspiracy in the court’s review of the
Commission's refusal to conduct a reconsideration proceeding. See Conso|idated Fibers
H, 32 ClT at _, 535 F. Supp. 2d at 1346-49 & 1352-59. in Conso|idated Fibers ii,
P|aintiffs raised identical arguments that focused on the completeness of the record, none
of which the court found persuasive_ g Here, as there, the conclusion is the same; the
Commission made "‘active, reasonable efforts to obtain relevant data."' Conso|idated
Fibers ii, 32 ClT at ?, 535 F. Supp. 2d at 1356 (quoting Al|eqhenv Ludlum Corp. v.
United States, 287 F.3d 1365, 1373 (Fed. Cir. 2002)).
2. Commission’s Treatment of the Original injury Determinations
P|aintiffs also claim that the Commission violated 19 U.S.C. § 1675a by not
reviewing the validity of the original injury determinations as part of the analysis of the
Sunset Reviews. Pls.’ i\/lem. at 8-9 (citing 19 U.S.C. § 1675a(a)(1)(A)). This argument
strikes the court as a thinly veiled attempt to continue to press for a reconsideration of the
original injury determinations arguments that the court has already addressed in
Conso|idated Fibers li. Here, it suffices to say that section 1675a(a)(1)(A) does not require
a full blown reconsideration of the original injury determination underlying an antidumping
duty order being considered in a sunset review lnstead, that provision simply requires the
Commission take into account its findings as to volume, price, and the impact of subject
Court No. 06-00134 Page 6
imports before the order was issued. 19 U.S.C. § 1675a(a)(1)(A). As the Statement of
Administrative Action accompanying the statute explains, the purpose of this inquiry is to
examine the most recent period of time in which subject imports competed without the
discipline of the order in place: "lf the Commission finds that pre-order . . . conditions are
likely to recur, it is reasonable to conclude that there is likelihood of continuation or
recurrence of injury." § Uruguay Round Agreements Act, Statement of Administrative
Action, H.R. Doc. No. 103-316, vol. 1, at 884 (1994), reprinted in 1994 U.S.C_C.A.N. 4040,
4209 ("SAA").
3. The Commission's Vo|ume Anaiysis
in the Sunset Reviews the Commission determined that the volume of the subject
imports were likely to increase significantly upon revocation. Pub. Views at 24, 27. The
Commission found that subject foreign producers were highly export-oriented during the
POR and that they maintained a significant presence in the U.S. market, even with the
orders in place. l_d_. at 24. The Commission also found that subject foreign producers
possessed substantial production capacity throughout the POR and ended the period with
significant unused capacity that could be used to increase exports to the United States.
Conf_ Views at 35-37. Additionaliy, the Commission found that the subject producers'
unused capacity in interim 2005 was equivalent to a percentage“ of U.S. apparent
consumption in the same period. ld_. at 37. Finally, the Commission noted that the record
showed that a number of antidumping duty orders had been imposed in Asia and Europe
during the POR, and that a rapidly expanding Chinese certain PSF industry was likely to
4 [[ i]
Court No. 06-00134 Page 7
push Korean and Taiwan exports out of the large Chinese market. Pub. Views at 26.
Given these factors, the Commission concluded that the increasingly export-oriented
Korean and Taiwan producers were likely to bolster their flagging capacity utilization by
increasing their exports of subject PSF to the United States upon revocation. Pub. Views
at 26-27_
a. Margins
As their first challenge to the Commission's likely volume analysis, P|aintiffs argue
that the Commission's volume analysis was "fundamentally-flawed" because subject import
volume over the POR was inversely related to the dumping margins found in the
administrative reviews conducted by Commerce, suggesting in Plaintiffs' view, that the
orders had no effect. § Pls.' i\/lem. at 20-22. Plaintiffs' argument contains a number of
legal and factual flaws. First, Plaintiffs’ claim that the orders had no effect on the subject
imports during the POR is incorrect As P|aintiffs themselves concede, imposition of the
orders had a disciplining effect on the dumping margins, nearly all ofwhich fell significantly
during the first administrative review of the orders. l_), 19 U.S.C. §
1677(35)(C)(iv); see also SAA at 887, 1994 U.S.C.C.A.N. at 421 1-12. Although P|aintiffs
may contend that the low or de minimis dumping margins calculated during Commerce's
administrative reviews would likely continue, Commerce itself determined that dumping
was likely to continue or recur at margins of 7.91% for Korean producers and from 3.79%
to 11.50% for Taiwan producers, and the Commission properly considered Commerce's
announced likely margins in its analysis _S_¢Y Pub. Views at 29 n.207; SAA at 887, 1994
U.S.C.C.A_N. at 4212 ("The Commission shall not itself calculate or otherwise determine
likely dumping margins . . . ."). Given this, the Commission's consideration of these
margins, which were higher than those found in the administrative review results, was
reasonable and consistent with the statute.
l\/loreover, despite Plaintiffs' claims, the Commission's finding that subject import
volume was significant throughout the POR even with the orders in place is consistent with
the Commission's finding that subject import volume will increase significantly upon
revocation. §e_e_ Pub. Views at 24. As the Commission found, the fact that subject imports
maintained a significant presence in the market even with the orders in place suggests that
revocation of the orders would allow the subject foreign producers to increase their
Court No. 06-00134 Page 9
presence in the U.S. market considerably once the orders and their disciplining effect no
longer limited their ability to sell their products in the market at higher dumping margins.
g at 24-27. in other words, the Commission reasonably relied on the subject imports'
substantial presence in the market as one factor supporting its affirmative volume finding
even though the subject imports were sold at low margins during the POR.
b. PSF Capacity in Korea and Taiwan
P|aintiffs also argue that Korean and Taiwanese producers would be unlikely to
increase their exports to the United States after revocation because there was likely to be
strong global demand for PSF and there were different§ average unit values ("AUVs") in
third country markets as compared to the United States. S_ee Pls.` Mem. at 23-26. The
Commission, however, reasonably addressed and rejected each ofthese arguments. With
respect to strong global demand for PSF, the Commission observed that Korean and
Taiwanese producers had suffered declining capacity utilization rates during the POR,
even though there had been strong global demand over this period. Pub. Views at 25-26
& n,189. The Commission found that Korean and Taiwanese producers were operating
at certain capacity utilization rates@ in interim 2005, and their unused capacity7 was
equivalent to a percentages of U.S. apparent consumption. Conf. Views at 37. Under
5 ll ll
6 Korea’s capacity utilization rate was [[ ]], while Taiwan’s was [[ ]].
Conf. Views at 37.
7 The combined unused capacity was [[ ]] million pounds. Conf. Views. at 37.
8 ll ]]
Court No. 06-00134 Page 10
these circumstances, the Commission reasonably determined that growing unused
capacity of this magnitude was likely to place pressure on the subject producers to
increase exports to the United States upon revocation of the orders, despite strong
demand in the global market. Conf. Views at 38-39; Pub. Views at 26-27.
With respect to the AUVs in other markets, the Commission noted that AUV
comparisons were of little probative value for purposes of its analysis because there were
differences in the product mix exported to different markets. Pub. Views at 26 n.189. As
an example, the Commission cited the dramatic increase in the AUV of Korean and Taiwan
exports to China over the POR that resulted from the expansion of Chinese producers
taking market share of all but the highest-quality PSF sold in China. l_d_. The Commission
found that the Korean and Taiwan producers' capacity utilization rates were declining,
which suggested to the Commission that those producers would increase their exports to
the U.S. market upon revocation. Pub. Views at 25-27 & n.189. On the issue of capacity,
the court simply cannot discern any unreasonableness in the Commission’s factual
findings, or the conclusions that flow from them.
c. Third Country Barriers
P|aintiffs also argue that the existence ofthird county barriers, like antidumping duty
orders, will not trigger an increase in subject imports to the United States upon revocation
because Korean and Taiwan producers have been able to trade in those markets in spite
of those barriers_ Pl.s’ i\/lem. at 23, 26. To illustrate their point, P|aintiffs argue that a
certain export market°“` has become the most important for [[‘
9 ll ]]
Court No. 06-00134 ` Page 11
]] and there is no hard data
record evidence of a barrier or restraint to this trend." |_