Slip Op. 08-5
UNITED STATES COURT OF INTERNATIONAL TRADE
BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
________________________________________
:
BRATSK ALUMINUM SMELTER and :
RUAL TRADE LIMITED :
:
Plaintiffs, :
:
and :
:
SUAL HOLDING and ZAO KREMNY, and :
GENERAL ELECTRIC SILICONES LLC :
:
Plaintiff-Intervenors :
:
v. : Court No. 03-00200
:
UNITED STATES, :
:
Defendant, :
:
and :
:
GLOBE METALLURGICAL INC. and :
SIMCALA, INC. :
:
Defendant-Intervenors. :
:
________________________________________
Held: The Remand Determination filed by the International
Trade Commission on March 22, 2007, is affirmed in its entirety.
As all other issues have been decided, this case is dismissed.
Vorys, Sater, Seymour and Pease LLP (Frederick P. Waite and
Kimberly R. Young), for SUAL Holding and ZAO Kremny, plaintiff-
intervenors.
James M. Lyons, General Counsel; Andrea C. Casson, Assistant
General Counsel, Office of the General Counsel, United States
International Trade Commission (June B. Brown), for the United
States, defendant.
DLA Piper US LLP (William D. Kramer, Martin Schaefermeier, and
James A. Earl), for Globe Metallurgical Inc. and SIMCALA, Inc.,
defendant-intervenors.
Court No. 03-00200 Page 2
Dated: January 15, 2008
OPINION
TSOUCALAS, Senior Judge: This case is before this Court on
remand from the United States Court of Appeals for the Federal
Circuit (“CAFC”). See Bratsk Aluminum Smelter v. United States
(“Bratsk CAFC”), 444 F.3d 1369 (2006).
The Court has jurisdiction over this matter pursuant to 19
U.S.C. § 1516a(a)(2)(A)(i)(I) and 28 U.S.C. § 1581(c).
For the reasons explained below, the Court finds that the
International Trade Commission’s (“ITC”) Remand Determination filed
on March 22, 2007 (the “Remand Determination”) is responsive to the
CAFC’s mandate in Bratsk CAFC and to this Court’s August 17, 2006,
remand order (the “Remand Order”) and is therefore affirmed in its
entirety.1
STANDARD OF REVIEW
The Court will uphold an ITC determination unless it is
“unsupported by substantial evidence on the record, or otherwise
not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i) (2000).
In an administrative review, the court cannot substitute its
judgment for that of the ITC when the choice is “between two fairly
1
Unless otherwise noted the term “Remand Determination”
herein shall refer to the Public Version of that document filed
by the ITC.
Court No. 03-00200 Page 3
conflicting views, even though the court would justifiably have
made a different choice had the matter been before it de novo.”
Am. Spring Wire Corp. v. United States, 8 CIT 20, 22, 590 F. Supp.
1273, 1276 (1984)(quoting Universal Camera Corp. v. NLRB, 340 U.S.
474, 488 (1951).
DISCUSSION
I. Abbreviated Background
In antidumping proceedings, the ITC is charged with
determining whether an industry in the United States has suffered,
or is threatened with, material injury by reason of imports. See 19
U.S.C. § 1673d(b).
On February 11, 2003, the Department of Commerce determined
that silicon metal imports from Russia were, or were likely to be,
sold in the U.S. at less than fair value (“LTFV”). On March 24,
2003, the ITC published notice that the domestic silicon metal
industry was materially injured by reason of subject imports from
Russia. See Silicon Metal from Russia, 68 Fed. Reg. 14,260. On
March 26, 2003, Commerce published an antidumping duty order on
imports of silicon metal from Russia. See Antidumping Duty Order:
Silicon Metal from Russia, 68 Fed. Reg. 14,578. Appellants argued
to the ITC that the CAFC opinion in Gerald Metals, Inc. v. United
States (“Gerald Metals”), 132 F.3d 716 (1997), required a specific
determination as to whether the non-subject imports would simply
Court No. 03-00200 Page 4
replace the subject imports with the same impact on the domestic
market. The ITC made no such determination.
On April 25, 2003, plaintiffs Bratsk Aluminum Smelter and RUAL
Trade Limited initiated an action before this Court challenging
several aspects of the ITC’s final determination, including whether
the Russian imports caused injury to the domestic industry. This
Court remanded the case to the ITC on an unrelated issue. In its
remand (filed September 15, 2004), the ITC incorporated its initial
decision by reference and clarified some of its findings. On
December 3, 2004, this Court affirmed the ITC’s remand
determination in its entirety and dismissed the case. See Bratsk
Aluminum Smelter v. United States (“Bratsk CIT”), Slip Op. 04-153
(2004). SUAL Holding and ZAO Kremny appealed this Court’s
decision.2
On April 10, 2006, the CAFC vacated this Court’s decision and
instructed us to remand the case back to the ITC to “specifically
address whether the non-subject imports would have replaced subject
imports during the period of investigation.” Bratsk CAFC, 444 F.3d
at 1376. The Bratsk CAFC opinion noted that “[t]he sole point of
contention in this appeal is whether the Commission established
that the injury to the domestic industry was ‘“by reason of”’ the
subject imports.” Id. at 1372.
2
Plaintiffs Bratsk Aluminum Smelter and RUAL Trade
Limited, filed a notice of dismissal on December 6, 2004, and are
not parties to this appeal.
Court No. 03-00200 Page 5
On August 17, 2006, this Court issued its Remand Order
according to the CAFC’s instructions. The Remand Order further
ordered that if the ITC finds material injury where fairly traded
commodity imports are competitively priced, the ITC must explain in
a meaningful way why the non-subject imports would not replace the
subject imports while continuing to cause injury to the domestic
industry.
II. Discussion
A. ITC Remand Determination Decision
In order to comply with this Court’s Remand Order, the ITC,
among other things, sent questionnaires to silicon metal producers
in seventeen non-subject countries and received responses from
foreign producers in four countries and from seven U.S. embassies.
See Remand Determination. The ITC also reviewed secondary sources
on silicon metal production. The ITC concluded in its Remand
Determination, as further described infra, that an industry in the
United States is materially injured by reason of imports of silicon
metal from Russia (the “subject imports”) that the Department of
Commerce has found are sold in the U.S. at LTFV. See id.
In completing its Remand Determination and reaching its
conclusion, the ITC used the Bratsk CAFC language to fashion a
“replacement/benefit test” (i.e., “whether non-subject imports
would have replaced the subject imports without any beneficial
Court No. 03-00200 Page 6
effect on domestic producers”). Remand Determination at 12; Bratsk
CAFC, 444 F.3d at 1375. The replacement/benefit test examines
separately the issues of “replacement” and “benefit.”3
B. The ITC’s Findings
(i) Replacement during the period of investigation
The CAFC noted that a finding by the ITC that “non-subject
imports could not replace subject imports because producers of non-
subject imports lacked the capacity to supply the necessary volume
to the U.S. market . . . would certainly be relevant to the
causation analysis under Gerald Metals.” Bratsk CAFC, 444 F.3d at
1376.
In assessing whether the non-subject imports would have
replaced subject imports during the period of investigation (POI),
the ITC noted that it considered interchangeability of the product
and the “non-subject producers’ capacity to fill any void left by
subject imports . . .[including factors] such as commitments by
non-subject producers under long-term contracts, transportation
costs, or more attractive third-country markets.” Remand
Determination at 15-16.
3
The “benefit” portion of the ITC’s replacement/benefit
test, further discussed infra, examines whether, in the words of
the Bratsk CAFC opinion, “the price of the non-subject imports is
sufficiently above the subject imports such that the elimination
of the subject imports would have benefitted the domestic
industry.” Bratsk CAFC, 444 F.3d at 1376.
Court No. 03-00200 Page 7
The ITC found that “the evidence is mixed as to whether and to
what extent replacement would have occurred.” Id. at 16. The data
shows that from the second quarter to the third quarter of 2002,
subject import volume decreased by 12,400 short tons and non-
subject imports volume during the same period increased by 9,225
short tons, from which the ITC concludes that this “evidence
suggests some, although not total, replacement of subject imports
by non-subject imports over this limited period.” Id. at 16-17.
While granting that “non-subject countries theoretically had
enough excess capacity and exports to third-country markets to
replace the 34,153 short tons of silicon metal from Russia that
entered the United States in 2001,” the ITC notes that that fact
alone does not establish that foreign producers would have replaced
the subject imports with non-subject imports.4 Id. at 17. The ITC
cites, for instance, to the U.S. antidumping duty orders on Brazil
and China and to a Norwegian and Spanish focus on European markets
during the POI as arguing against a conclusion of total
replacement. Id. at 17-18.
Given the many variables in this kind of analysis, the ITC
does not, and probably cannot, make any definitive statements
ultimately as to this POI replacement data. It seems clear,
4
The excess capacity numbers of certain non-subject
importers during the POI are included in the Business Proprietary
version of the Remand Determination. See Remand Determination
(Business Proprietary Version) at 17.
Court No. 03-00200 Page 8
however, that the ITC believes the data likely points to a partial,
but not total, replacement of subject imports by non-subject
imports.5 It is not clear to this Court that the ITC’s belief as
to this particular point is necessarily justified by the record or
merely an expert’s educated guess.
(ii) Price benefit
In ordering reconsideration by the ITC, the CAFC clarifies
that “the mere existence of fairly traded commodity imports at
competitive prices” does not preclude a finding by the ITC of
material injury, because “[f]or example, it may well be . . .that
the price of the non-subject imports is sufficiently above the
subject imports such that the elimination of the subject imports
would have benefited the domestic industry.” Bratsk CAFC, 444 F.3d
at 1376. In its Remand Determination the ITC focuses on two
different measures of price data during the POI - purchaser price
data and average unit value (“AUV”) data.
(a) Purchaser price data during the POI
The ITC looked at purchaser price data on the largest non-
subject import sources as well as on subject imports and the
domestic product. See Remand Determination. The purchaser price
data represent certain percentages of the quantity for 2001 of non-
subject imports, domestically produced commercial shipments and
5
The ITC does not specify where along the spectrum of
partial to total replacement the non-subject imports replacement
of subject imports is likely to fall.
Court No. 03-00200 Page 9
subject imports. See id. (Business Proprietary Version) at 19-20.
The ITC found that the purchaser price data, covering all
three silicon metal sectors,6 “show that the subject imports
undersold the non-subject imports in 42 of 56 comparisons, that the
subject imports undersold the domestic product in all comparisons.
. . and that the non-subject imports undersold the domestic product
in 44 of 56 comparisons.” Id. at 20.
The Court notes that with respect to the fact that both the
subject imports and the non-subject imports undersold the domestic
product, it is important to examine the respective underselling
margin range and underselling margin average figures for both as
the ITC has done. See id. (Business Proprietary Version).
(b) AUV data during the POI
While conceding that AUV data is not as reliable as purchaser
price data, the ITC noted “that the AUVs of imports from the
individual non-subject countries were always higher on a full-year
and interim year basis than the AUVs of imports from Russia.”
Remand Determination at 20. The ITC found that on a quarterly
basis, with some exceptions, “subject import AUVs were also lower
than the AUVs for all non-subject imports.” Id. The ITC also
found that in the chemical sector “the AUVs of the non-subject
6
The three silicon metal sectors are secondary aluminum,
primary aluminum, and chemical.
Court No. 03-00200 Page 10
imports, while below those of the U.S. product, were higher than
those of the subject imports throughout the period investigated.”
Id. at 20-21.
The ITC concludes that the purchaser price and AUV data on the
record shows that “non-subject imports consistently oversold the
subject imports from Russia” and that “even if the non-subject
imports replaced some of the subject imports, the domestic industry
would nonetheless have derived a price benefit from imposition of
the order [as] [h]igher prices would have provided some relief to
the domestic industry . . . in that domestic producers would have
been able to raise their prices to some degree or at least maintain
prices rather than suffer price declines.” Id. at 21.
(c) Post-POI data
The Bratsk CAFC opinion noted that the fact that “spot prices
may have increased after the Russian imports exited the market may
be pertinent to the causation question” but added that this did not
“excuse the [ITC’s] failure to address the causation issue in
detail as required by Gerald Metals.” Bratsk CAFC, 444 F.3d at
1375-76. The CAFC also noted that the ITC “did not explain how
much the spot prices increased, the significance of that increase,
or the significance of the [eleven domestic contracts which
increased] for the domestic market.” Id. at 1376.
The ITC notes that it does not base its finding of material
injury on the post-POI data, but in reviewing that data they “find
that it is consistent with our affirmative determination and with
Court No. 03-00200 Page 11
our conclusion. . . that the domestic industry would have benefited
from imposition of an order on the subject imports.” Remand
Determination at 22.
The ITC found that the data shows that “U.S. producers made
both spot and contract sales at higher prices and were able to
expand their volume of sales after subject imports left the
market.” Id. The ITC noted that this rise in contract and spot
prices, along with increased sales volumes, allowed domestic
producers to restart furnaces shut down due to lack of orders at
prices sufficient to cover operating costs. See id. (Business
Proprietary Version) at 23. The ITC adds that certain independent
industry sources agreed with their conclusion that the recovery in
silicon metal spot prices can be attributed to the preliminary
antidumping duties. Id.
The Remand Determination contains data showing significant
post-POI increases in both volume and price by the domestic
producers in spot and contract sales after subject imports left the
market and restarting furnaces is a testament to such increases.
See id. (Business Proprietary Version) at 22-23.
The Court finds that the ITC has, as requested of it,
adequately explained the extent that the spot prices increased, the
significance of those increases, and the significance of the
domestic contract increases for the domestic market.
C. Analysis
Court No. 03-00200 Page 12
The Court will address the ITC’s Remand Determination in the
same section by section manner as laid out in the document itself.
First, the Court finds that the POI replacement data compiled and
analyzed by the ITC for the Remand Determination alone would not
have passed the more stringent causation standard required by the
CAFC under a Gerald Metals/Bratsk scenario.7 While it is fairly
clear that some replacement of subject imports by non-subject
imports would have occurred, it is impossible to say at what point
between partial and total replacement the line would have been
drawn. Therefore, it is equally impossible to know solely based on
this data whether or not the non-subject imports would have
replaced the subject imports without any beneficial effect in terms
of an increase in sales volume for domestic producers.
Second, the Court finds that the data compiled and analyzed by
the ITC on POI price benefits to the domestic industry, while
perhaps not dispositive in and of itself, is strongly indicative as
to causation. The purchaser price data and AUV data the ITC has
assembled indicates a clear, albeit not total, pattern of
7
The CAFC wrote that “[m]aterial injury determinations are
particularly difficult where the imports sold at LTFV compete
with identical imports not sold at LTFV.” Bratsk CAFC, 444 F.3d
at 1371. Accordingly, the CAFC held that when the Gerald Metals
circumstances prevail (i.e., “the antidumping investigation is
centered on a commodity product, and price competitive non-
subject imports are a significant factor in the market”), the ITC
is “required to make a specific causation determination and in
that connection to directly address whether non-subject imports
would have replaced the subject imports without any beneficial
effect on domestic products.” (Emphasis added). Bratsk CAFC, 444
F.3d at 1375.
Court No. 03-00200 Page 13
significant underselling during the POI by the subject imports from
Russia when compared to both the non-subject imports and the
domestic product. The subject imports underselling data is
significant, both as to the total instances of underselling in the
head-to-head price comparisons (as referenced supra, the subject
imports undersold the non-subject imports in 42 of 56 comparisons
and undersold the domestic product in all comparisons) and as to
the extent of the underselling (i.e., the underselling margin range
and underselling margin average figures of those price
comparisons). In sum, the data supports the ITC’s conclusion that
even if the non-subject imports replaced some of the subject
imports, the domestic industry would nonetheless have derived a
price benefit from imposition of the antidumping duty order.
Finally, further bolstering the ITC’s conclusion, the post-POI
data for the domestic producers exhibits significant increases in
spot sales, contract sales and sales volume and may be interpreted
as a strong indication of a true and substantial benefit to the
domestic industry resulting from Commerce’s preliminary affirmative
determination. The stronger domestic numbers, following as they
did the preliminary determination, appear to show a direct and real
world cause and effect relationship, and are therefore more
valuable than if they were merely the product of a statistical or
theoretical model or of an educated guess on the part of the ITC.
The Court finds therefore that the ITC has addressed the
causation issue specifically and in detail as required by Gerald
Court No. 03-00200 Page 14
Metals and Bratsk CAFC and that the POI price data when taken
together with the post-POI data adequately supports the conclusions
that the ITC has made as to a tangible and significant benefit
accruing to the domestic industry, at minimum as to price relief
and very likely (as the post-POI data would appear to attest) as to
some increased sales volume, from imposition of the order.
As requested of the ITC in this Court’s Remand Order of August
17, 2006, the Court finds that (1) the ITC has met its obligation
to specifically address whether the non-subject imports would have
replaced subject imports during the POI; and (2) having found
material injury where fairly traded commodity imports are
competitively priced, the ITC has explained in a meaningful way why
the non-subject imports would not replace the subject imports while
continuing to cause injury to the domestic industry. Accordingly,
this Court is satisfied that the ITC has demonstrated that the
injury to the domestic industry was by reason of the subject
imports.
Court No. 03-00200 Page 15
CONCLUSION
The Court holds that the Remand Determination filed by the ITC
is responsive to the CAFC’s mandate in Bratsk CAFC and thus is
affirmed in its entirety. Judgment will be entered accordingly.
/s/ Nicholas Tsoucalas
NICHOLAS TSOUCALAS
SENIOR JUDGE
Dated: January 15, 2008
New York, New York