Papierfabrik August Koehler Ag v. United States

Slip Op. 09-132

UNITED STATES COURT OF INTERNATIONAL TRADE

PAPIERFABRIK AUGUST KOEHLER AG
and KOEHLER AMERICA,INC.,

Plaintiffs,

– and –

MITSUBISHI INTERNATIONAL CORPORATION,
MITSUBISHI HiTECH PAPER FLENSBURG
GmbH, and MITSUBISHI HiTECH PAPER Before: Pogue, Judge
BIELEFELD GmbH,
Court No. 08-00430
Plaintiff-Intervenors,

v. Public Version
UNITED STATES and the UNITED STATES
INTERNATIONAL TRADE COMMISSION,

Defendants,

– and –

APPLETON PAPERS INC.,

Defendant-Intervenor.

OPINION

[Plaintiffs’ motion for judgment on the agency record denied;
judgment entered for Defendants.]

Dated: November 17, 2009

Hunton & Williams LLP (Richard P. Ferrin and William
Silverman)for Plaintiffs.

Steptoe & Johnson LLP (Jamie B. Beaber and Eric C. Emerson) for
Plaintiff-Intervenors.

James M. Lyons, General Counsel, Neal J. Reynolds, Assistant
General Counsel for Litigation, Office of the General Counsel,
U.S. International Trade Commission (Marc A. Bernstein) for
Court No. 08-00430 Page 2

Defendant U.S. International Trade Commission.

King & Spalding LLP (Gilbert B. Kaplan, Daniel L. Schneiderman
and Joseph W. Dorn) for Defendant-Intervenor.

Pogue, Judge: In this action, Plaintiff Papierfabrik August

Koehler AG and its subsidiary importer Koehler America, Inc.

(collectively “Plaintiffs” or “Koehler”) seek review of the

United States International Trade Commission’s (“Defendant” or

“the Commission” or “ITC”) final determination that the domestic

producers of certain light weight thermal paper (“LWTP”) are

threatened with material injury by reason of imports of subject

LWTP from Germany. See Certain Lightweight Thermal Paper from

China and Germany, 73 Fed. Reg. 70,367 (ITC Nov. 20, 2008) (final

determinations) (“Comm’n Final Determination”).1

Because the court concludes that the Commission’s

determination, issued pursuant to Section 735(b)(1)(A)(ii) of the

Tariff Act of 1930, as amended, 19 U.S.C. § 1673d(b)(1)(A)(ii)

(2006),2 is supported by substantial evidence, Plaintiffs’ motion

for judgment on the agency record is denied, and the Commission’s

1
The views of the Commission are contained in Certain
Lightweight Thermal Paper from China and Germany, Views of the
Commission, USITC Pub. 4043, Inv. Nos. 701-TA-451 & 731-TA-1126-
1127 (Final) (Nov. 2008), Admin. R. Pub. Doc. 285 (“Comm’n
Views”).
2
Further citation to the Tariff Act of 1930 is to Title 19
of the U.S. Code, 2006 edition.
Court No. 08-00430 Page 3

determination is affirmed in all respects. Plaintiffs

essentially request that the court re-weigh evidence that the

Commission alone has been authorized to weigh. See Goss Graphics

Sys., Inc. v. United States, 22 CIT 983, 1008-09, 33 F. Supp. 2d

1082, 1104 (1998) (“[T]he ITC has the discretion to make

reasonable interpretations of the evidence and to determine the

overall significance of any particular factor in its analysis[,]

[and] the court may not reweigh the evidence or substitute its

judgment for that of the ITC.”) (quotation marks and citations

omitted), aff’d 216 F.3d 1357 (Fed. Cir. 2000).

The court has jurisdiction over this case pursuant to

28 U.S.C. § 1581(c).

BACKGROUND

A. Administrative Proceedings Below

Beginning with its September 19, 2007, petition to the

United States Department of Commerce (“Commerce” or “the

Department”) and the Commission to initiate investigations of

certain LWTP from China, Germany, and Korea,3 Appleton Papers,

3
The investigation with respect to Korea was terminated due
to insufficient import quantity. Certain Lightweight Thermal
Paper From China, Germany, and Korea, 72 Fed. Reg. 70,343 (ITC
Dec. 11, 2007) (preliminary determinations) (“The Commission also
determines that imports of certain lightweight thermal paper from
Korea are negligible, and therefore, terminates its investigation
with regard to Korea.”). The Commission’s “determination
concerning subject imports from China is not the subject of any
litigation.” (Def.’s Mem. in Opp’n to Mot. of Pls.’ for J. on
Court No. 08-00430 Page 4

Inc. (“Appleton” or “Defendant-Intervenor”) has alleged, inter

alia, that these products were being sold at less than fair

market value (“LTFV”). (Compl. ¶ 6; Def.-Intervenor’s Mem. in

Opp’n to Pls.’ Mot. for J. on Agency R. Under Rule 56.2 (“Def.-

Intervenor’s Mem.”) 3-4; Comm’n Final Determination, 73 Fed. Reg.

at 70,367.)

After notice and administrative proceedings, Commerce, on

October 2, 2008, issued its final determination, pursuant to

19 U.S.C. § 1673d(a)(1), finding that imports of LWTP from

Germany are being, or are likely to be, sold in the United States

at LTFV. Lightweight Thermal Paper from Germany, 73 Fed. Reg.

57,326 (Dep’t Commerce Oct. 2, 2008) (notice of final

determination of sales at less than fair value) (“Commerce Final

Determination”). Koehler was a mandatory respondent in this

investigation, id. at 57,327 n.4, and was assigned a weighted-

average dumping margin4 of 6.50% for all subject merchandise. Id.

at 57,328. All other respondents received the same 6.50% rate.

Id. There is no indication in the record that Koehler contested

this final determination.

Agency R. Under Rule 56.2 (“Def.’s Mem.”) 5 n.1.)
4
The weighted-average dumping rates were determined for the
period from July 1, 2006 to June 30, 2007. Commerce Final
Determination, 73 Fed. Reg. at 57,328. The Commission’s period
of investigation (“POI”) was from January 1, 2006 to June 30,
2008. Comm’n Views at 3-4.
Court No. 08-00430 Page 5

Following Commerce’s determination, on November 20, 2008,

the Commission issued its final determination that a domestic

industry is threatened with material injury by reason of LWTP

imports from Germany. Comm’n Final Determination, 73 Fed. Reg. at

70,367; but see id. at 70,367 n.2 (noting the dissenting opinions

of Chairman Shara L. Aranoff, Vice Chairman Daniel R. Pearson,

and Commissioner Deanna Tanner Okun). Giving effect to the

Commission’s determination, Commerce issued an antidumping duty

order on LWTP from Germany. Lightweight Thermal Paper from

Germany and the People’s Republic of China, 73 Fed. Reg. 70,959

(Dep’t Commerce Nov. 24, 2008) (antidumping duty orders)

Plaintiffs and Plaintiff-Intervenors now challenge the

Commission’s determination. Specifically, Plaintiffs contest the

Commission’s treatment of the relevant domestic industry; its

decision to include the entire class of subject imports within

its threat analysis; its determination regarding the likelihood

of increase in German LWTP imports; its likely price effect

determination; and its determination with respect to the

vulnerability of the domestic industry. After describing the

Commission’s determinations and reasoning and explaining the

relevant standard of review, the court will discuss each

challenge in turn.
Court No. 08-00430 Page 6

B. Commission Determinations and Reasoning

LWTP is paper with a thermal active coating which, when used

in printers containing thermal print heads, reacts to heat to

form images on paper. Comm’n Views at 5. This type of paper “is

typically (but not exclusively) used in point-of-sale

applications such as ATM receipts, credit card receipts, gas pump

receipts, and retail store receipts.” Commerce Final

Determination, 73 Fed. Reg. at 57,327. Commerce’s definition of

the scope of imported merchandise under investigation included

both “jumbo” rolls, a semifinished version of the product, and

“slit” rolls, the end-use product. See Commerce Final

Determination, 73 Fed. Reg. at 57,327 n.5; Comm’n Views at 5.

Producers of jumbo rolls are referred to as “coaters,” whereas

producers who subsequently convert the jumbo rolls into slit

rolls are referred to as “converters.” See Comm’n Views at 5-8.

Koehler and Plaintiff-Intervenors are coaters who accounted for

all imports of LWTP from Germany subject to the investigation at

issue in this case. Id. at 3. Appleton is one of the two

domestic coaters of LWTP. Id. at 15.

Most LWTP is sold in the United States in basis weights of

either 48 grams per square meter (“48 gram”) or 55 grams per

square meter (“55 gram”). Id. at 16. During the POI, the

Commission found that domestic coaters’ shipments of 55 gram LWTP
Court No. 08-00430 Page 7

far exceeded their shipments of 48 gram LWTP, id.; in fact,

“domestic industry did not produce comparable 48 gram jumbo rolls

for the vast majority of the period of investigation.” Id. at 30.

Appleton introduced a 48 gram product in 2007, which became

available in the fall of that year. Id. At the same time, the

quantity of shipments to the United States of 55 gram LWTP from

Germany declined during the POI, while the quantity of shipments

of 48 gram LWTP increased. Id. at 16-17.

The Commission determined that subject imports of 55 gram

LWTP from Germany generally oversold the domestic like product,

see id. at 32, while subject imports of 48 gram LWTP from Germany

generally undersold the domestic like product. See id.5

Nevertheless, the Commission found that sales of 48 gram LWTP

from Germany “could not have taken significant sales or revenues

from domestically produced 48 gram jumbo rolls throughout 2007,

because Appleton did not offer such products during much of the

year and [the other domestic coater] did not offer a competitive

[] product.” Id. at 36.

5
See Certain Lightweight Thermal Paper from China and
Germany, Confidential Views of the Commission, Admin. R. Con.
Doc. 522 (“Comm’n Views (Conf.)”) at 52-53 (“The [55 gram]
subject imports from Germany oversold the domestic like product
in [[ ]] quarterly comparisons. . . . The [48 gram]
subject imports undersold the domestically produced product in
[[ ]] quarterly comparisons.”) (footnotes omitted).
Court No. 08-00430 Page 8

Although the Commission determined that “[o]verall domestic

industry financial performance declined from 2005 to 2007,” id.

at 35, it did not “attribute the declines in 2007 financial

performance to the increased quantities of subject imports from

Germany, [] because the subject imports from Germany increased at

a time of rising demand, did not capture significant additional

market share, and did not have significant adverse price

effects.” Id. (footnote omitted). The Commission found that “the

increase in subject imports from Germany involved [48 gram jumbo

rolls, which were] types of products not consistently offered by

the domestic industry, although by interim 2008 the domestic

industry was increasingly selling 48 gram jumbo rolls.” Id. at

30-31 (footnote omitted). Accordingly, the Commission

“conclude[d] that the subject imports from Germany did not have a

significant adverse impact on the domestic industry as a whole

during the [POI].” Id. at 36 (footnote omitted).

Nevertheless, the Commission determined that a threat of

material injury did exist to the domestic industry by reason of

the subject LWTP imports from Germany. Comm’n Final

Determination, 73 Fed. Reg. at 70,367; but see Comm’n Views at 36

n.236 (noting that “Chairman Aranoff, Vice Chairman Pearson, and

Commissioner Okun have made negative determinations on Germany

and do not join the [threat of material injury portion] of this
Court No. 08-00430 Page 9

opinion” (citation omitted)). Specifically, the Commission found

that “a continuation of the gradual increase in subject import

volumes from Germany that occurred during the [POI] is likely in

the imminent future,” Comm’n Views at 36, noting that “[w]hile

the German producers did not add any new LWTP production

facilities during this period, they were able to increase

capacity through a combination of achieving greater efficiencies

and using capacity previously devoted to producing other products

to produce LWTP instead,” id. (citations omitted), and that

“[t]he record contains no indication that the German producers

cannot continue to increase capacity through such means in the

imminent future.” Id. (footnote omitted).

Further, the Commission found that “[a]s the German

producers’ capacity and shipments increased during the [POI],

their exports to the United States increased roughly

commensurately,” id. at 37, and that this was “likely to continue

in the imminent future,” id., because “[t]he United States was a

significant export market for the German producers during the

[POI], and the German producers project[ed] it [would] remain so

in the imminent future.” Id. (citation omitted). The Commission

noted that Koehler planned to open a new coating facility in the

United States that would not become operational until 2010, and

that this “provide[d] a further incentive for Koehler, [a
Court No. 08-00430 Page 10

significant6] exporter of subject merchandise from Germany, to

continue to increase its presence in the U.S. market in the

imminent future while its projected U.S. facility is being

planned and constructed.” Id. (citation and footnote omitted).7

Finally, the Commission determined that these “increased

subject imports from Germany that are likely in the imminent

future will have greater price effects than those observed during

the [POI].” Id. It noted that “several considerations indicate

that imports entering in the imminent future will be heavily

6
See Comm’n Views (Conf.) at 62 (characterizing Koehler as
“the [[ ]] exporter of subject merchandise from
Germany”). See also Comm’n Views at 37 (same).
7
Chairman Aranoff, Vice Chairman Pearson, and Commissioner
Okun dissented, arguing that [[

]]
Certain Lightweight Thermal Paper from China and Germany,
Confidential Dissenting Views of Chairman Aranoff, Comm’rs
Pearson & Okun, Admin. R. Con. Doc. 532, at 1. The dissenters
noted that [[

]] Id. at 4. They further argued that [[

]] Id.
Court No. 08-00430 Page 11

concentrated in the 48 gram product,” id.,8 and that, due to

Appleton’s recent construction of a new facility9 and

introduction of its own 48 gram product, “48 gram jumbo rolls

will increasingly be the focus of competition between [the like

domestic product and the subject imports from Germany].” Id.

at 38. Accordingly, the Commission concluded that “the [sales

data for] German 48 gram jumbo rolls observed during the

[POI][10] will have far greater significance in the imminent

future.” Id.; see also id. (“Because the record contains no

evidence that the [trend] observed during the [POI] with respect

to [48 gram LWTP] is likely to change, we conclude that it will

likely continue in the imminent future.”) (footnote omitted).

So too the Commission found the domestic industry “vulnerable to

8
See Comm’n Views at 37 (listing considerations including
the fact that “Koehler, which is the predominant exporter of
subject merchandise from Germany, discontinued its shipments of
its principal 55 gram product to the United States in March
2008"; that “interim 2008 U.S. shipments of subject German
imports of 48 gram jumbo rolls exceeded those of 55 gram jumbo
rolls”; and that “the 48 gram product has seen increasing
acceptance in the U.S. market”).
9
Appleton opened a new coating facility in West Carrollton,
Ohio (“the West Carrollton facility”) on August 6, 2008, id.
at 15, which substantially increased domestic coating capacity.
Id. at 34.
10
See Comm’n Views (Conf.) 64 (“[T]he [[
]] by German 48 gram jumbo rolls observed during the
[POI] will have far greater significance in the imminent
future.”).
Court No. 08-00430 Page 12

the effects of additional subject imports,” id. at 39, because of

the “consistently unprofitable financial performance of the

domestic industry during the [POI].” Id.

In determining the relevant domestic industry, in addition

to jumbo roll coaters, the Commission also included converters

within the scope of that domestic industry. Id. at 8. The

Commission received questionnaire responses from twenty domestic

converters, estimated to account for 62.1 percent of domestic

LWTP conversion activities during the relevant period. Id. at 15.

The Commission noted that while both of the two domestic coaters

supported the petition for the imposition of an antidumping duty

order, twelve out of twenty converters opposed the imposition of

duties, and only three of these twenty supported the petition

with respect to Germany. Id. at 39 n.261. The Commission

explained, however, that “[t]his is not especially surprising,

insofar as the subject producers supply, and do not compete with,

the U.S. converters,” id., and that, “[i]n any event, the

positions of domestic producers in support or opposition to the

petition do[] not override [the Commission’s] review of the

trade, pricing, financial data, and other information in the

record indicating whether the domestic industry is materially

injured or threatened with material injury by reason of the

subject imports.” Id. (citing Certain Orange Juice from Brazil,
Court No. 08-00430 Page 13

USITC Pub. 3930, Inv. No. 731-TA-1089 (Final) (Remand) (June

2007) at 14).

STANDARD OF REVIEW

Where, as here, an action is brought under 19 U.S.C.

§ 1516a(a)(2) seeking review of a final determination of the

Commission under 19 U.S.C. § 1673d, “[t]he court shall hold

unlawful any determination, finding, or conclusion found . . . to

be unsupported by substantial evidence on the record, or

otherwise not in accordance with law.” 19 U.S.C.

§ 1516a(b)(1)(B)(i).

The substantial evidence standard of review “can be

translated roughly to mean ‘is [the determination]

unreasonable?’” Nippon Steel Corp. v. United States, 458 F.3d

1345, 1351 (Fed. Cir. 2006) (alteration in original) (quoting

SSIH Equip. S.A. v. U. S. Int’l Trade Comm’n, 718 F.2d 365, 381

(Fed. Cir. 1983)). The agency’s decision must be supported by

substantial evidence on the record as a whole, see generally

Gerald Metals, Inc. v. United States, 132 F.3d 716 (Fed. Cir.

1997), and “must take into account whatever in the record fairly

detracts from its weight.” Universal Camera Corp. v. NLRB, 340

U.S. 474, 488 (1951). Thus, where only one reasonable conclusion

can be drawn from the record, a determination contrary to that

conclusion cannot be supported by substantial evidence. Gerald
Court No. 08-00430 Page 14

Metals, 132 F.3d at 720-723. On the other hand, the possibility

of drawing two inconsistent conclusions from the evidence does

not render the agency’s determination unreasonable, Consolo v.

Fed. Maritime Comm’n, 383 U.S. 607, 620 (1966), and where

“[s]ubstantial evidence exists on both sides of the issue[,]

. . . the statutory substantial evidence standard compels

deference to the [agency].” Nippon Steel, 458 F.3d at 1354.

DISCUSSION

A. Relevant Domestic Industry Analysis

1. Purported Focus on Appleton

Plaintiffs first argue that the Commission unlawfully

“limited [its] threat analysis entirely [to] predictions of the

effect of future imports of 48-gram German jumbo rolls on one

producer, Appleton.” (Mem. in Supp. of Pls.’ Mot. for J. on

Agency R. Under Rule 56.2 (“Pls.’ Mem.”) 12 (citing Comm’n Views

(Conf.) at 63-64 [Comm’n Views at 38]).)11 In support of their

argument, Plaintiffs point to 19 U.S.C. § 1673(2)(A) (Commission

required to make determination with respect to “an industry in

the United States”) and 19 U.S.C. § 1677(4)(A) (defining

11
Plaintiffs claim that the Commission’s analysis made no
mention of the subject imports’ threatened impact on either the
other domestic coater, or the twenty converters included in the
scope of the Commission’s industry determination. (Pls.’ Mem. 13-
14; Reply in Supp. of Pls.’ Mot. for J. on Agency R. Under Rule
56.2 (“Pls.’ Reply”) 2-4.)
Court No. 08-00430 Page 15

“industry” as “the producers as a whole of a domestic like

product”) (Pls.’ Mem. 10), and the Commission’s own determination

that the domestic industry “encompass[es] all converters and

coaters of LWTP” (id. at 12 (citing Comm’n Views (Conf.) at 15

[Comm’n Views at 10])).

The record before the court, however, does not support

Plaintiffs’ argument. Contrary to Plaintiffs’ assertions, the

Commission did not focus exclusively on the effect of future

German imports of 48 gram LWTP on Appleton, but rather

consistently discussed its conclusions as to the effect of such

importation on the industry as a whole. See Comm’n Views at 38

(“[T]he increased lower-priced imports of 48 gram jumbo rolls

from Germany that are likely in the imminent future . . . will

begin to have significant price effects on domestically produced

55 gram jumbo rolls.”); id. (“[A]s 48 gram products become more

important in the U.S. market, the low prices German producers

offer on their 48 gram products will restrict the ability of

domestic producers to adjust prices on 55 gram products

commensurately with costs.”); id. at 3912 (“In light of the

consistently unprofitable financial performance of the domestic

12
The court notes that, in addition to Appleton’s 55 gram
product, “Kanzaki’s [the other domestic coater] 53 gram product
is included in the tabulation for 55 gram products.” Comm’n Views
at 16 n.107.
Court No. 08-00430 Page 16

industry during the [POI], we find the industry to be vulnerable

to the effects of additional subject imports.” (footnote

omitted)); see also id. 35 (“Overall domestic industry financial

performance declined from 2005 to 2007. The combined operating

margin of coaters and converters was negative [throughout the

POI].” (citation and footnote omitted)).

Moreover, it is within the Commission’s discretion to place

greater weight on certain members of the domestic industry, in

proportion to their relative importance. “[A]s legislative

history shows[,] . . . ‘[i]n making its injury determination, the

[Commission] may give greater weight to one or the other group

within the industry, in proportion to their relative importance,

if either group accounts for a significant portion of the total

value of the processed product.’” Tropicana Prods., Inc. v.

United States, 31 CIT __, __, 484 F. Supp. 2d 1330, 1341-42

(2007) (quoting S. Rep. No. 100-71, at 111 (1987)); see also

General Motors Corp. v. United States, 17 CIT 697, 703-06, 827 F.

Supp. 774, 782-83 (1993) (upholding the Commission’s reliance on

data from a particular member of the industry when “the majority

did not disregard other data in the record, [and] emphasized that

it considered all the survey data”).

Weighing the evidence before it, the Commission determined

that 48 gram standard-sensitivity jumbo rolls will increasingly
Court No. 08-00430 Page 17

be the focus of competition between German subject imports and

the domestic industry, Comm’n Views at 38, and that Appleton was

the sole domestic producer of such rolls. See id. at 16, 30, 36.13

Accordingly, where, as noted above, the Commission has emphasized

the likelihood of future injury to the domestic industry as a

whole, to the extent that the Commission also devoted substantial

discussion to Appleton, its placement of a particular emphasis on

the most significant domestic competitor was reasonable under the

circumstances.14 See Tropicana Prods., 31 CIT at __, 484 F. Supp.

13
See also Certain Lightweight Thermal Paper from China and
Germany, Confidential Staff Report to the Commission, Inv. Nos.
701-TA-451 and 731-TA-1126-1127 (Final) (Oct. 20, 2008), Admin.
R. Con. Doc. 497 (“Comm’n Final Staff Report (Conf.)”) V-11 n.26
(explaining that, [[

]]). Conversely, German imports of such merchandise
during the POI consisted of products from only two German
producers. See Comm’n Views at 3, 16.
14
(See Def.’s Mem. 24 (“Because, as Koehler acknowledged to
the Commission, ‘German imports do not compete with U.S.
producers of slit rolls,’ and there was no competition for sales
between the German exporters and the U.S. converters, the
Commission’s analysis reasonably focused on the significant area
of competition between the subject imports and the domestic
industry.” (quoting German Resp’ts’ Prehr’g Br. (Final)
(Sept. 22, 2008), Admin. Pub. R. Doc. 170, at 8)).) Further, as
Defendant-Intervenor points out, “Appleton’s introduction of a 48
gram product in the fall of 2007 and its increasing capacity to
produce 48 gram product with its construction of the New
Carrollton facility was a pivotal difference between the injury
analysis (based on data through June 2008) and the threat
analysis (which considered the start-up of Appleton’s new plant
in August 2008).” (Def.-Intervenor’s Mem. 16 (citing Comm’n Views
(Conf.) at 24, 63-64 [Comm’n Views at 15, 38]).)
Court No. 08-00430 Page 18

2d at 1341-42.

2. Consideration of Domestic Industry Opposition

Plaintiffs also contend that the Commission acted contrary

to law by disregarding twelve domestic converters’ opposition to

the petition, citing the court’s ruling in Suramerica de

Aleaciones Laminadas, C.A. v. United States, 17 CIT 146, 163, 818

F. Supp. 348, 364 (1993), aff’d, 44 F.3d 978, 986 (1994), for the

proposition that “careful consideration of opposition to the

petition by domestic producers is even more important in

evaluating a threat case than in a present material injury

analysis.” (Pls.’ Mem. 14; Pls.’ Reply 6.) Plaintiffs further

argue that, because the Commission did not exclude any converter

from consideration under the statute’s related party provision,15

the Commission cannot “ignore or reject the fact that German

imports have either no effect or a positive effect on a large

segment of the domestic industry.” (Pls.’ Reply 8-9 & n.4

(listing evidence in the record in support of its claim that

“converters depend on German jumbo rolls of 48-gram as a vital

input”).)

15
See 19 U.S.C. § 1677(4)(B)(i) (“If a producer of a
domestic like product and an exporter or importer of the subject
merchandise are related parties, or if a producer of the domestic
like product is also an importer of the subject merchandise, the
producer may, in appropriate circumstances, be excluded from the
industry.”).
Court No. 08-00430 Page 19

There is, however, no statutory requirement that the

Commission give dispositive weight to industry opposition to the

petition in making its threat of material injury determination.

See generally 19 U.S.C. §§ 1677(7)(B) & (F). Although, “[i]n

making a determination of threat of material injury, [the] ITC

must weigh industry views and views of other interested parties,

together with all other relevant economic factors as appropriate

under the record of each particular investigation,” Suramerica,

44 F.3d at 984 (emphasis added),16 the Commission “may use its

sound discretion in determining the weight to afford these and

all other factors.” Id at 984. Further, “if the independent data

clearly support a finding of threat of injury,” then a threat of

injury determination may be warranted “even where the majority

[of the domestic industry] either does not support or actively

opposes the initiating petition.” Suramerica, 17 CIT at 163, 818

F. Supp. at 364.

16
See also id. at 983-84 (explaining that 19 U.S.C.
§ 1677(7)(F)(i) “directs that [the] ITC ‘shall’ consider all
relevant economic factors in a threat investigation,” and that
“[b]ecause the ITC must consider all ‘relevant economic factors,’
it must examine, beyond the factors specified in section 1677(7),
any other factors that tend ‘to make the existence of a [threat
of material injury] more probable or less probable than it would
be without the [factors]” (alteration in original) (quoting Fed.
R. Evid. 401 (defining relevancy)) (additional citation
omitted)).
Court No. 08-00430 Page 20

Recognizing the ITC’s authority to determine the weight of

evidence of industry support, Defendant-Intervenor correctly

points out that, when members of the domestic industry are viewed

proportionately, based on their total production values, a

majority of the domestic industry supported the petition.17

With respect to the opposing converters, the Commission

found that these members of the domestic industry are supplied

by, and are not in competition with, the subject imports, Comm’n

Views at 39 n.261, and that their opposition “does not override

[the Commission’s] review of the trade, pricing, financial data,

and other information in the record,” id., on the basis of which

Defendant made its affirmative threat of injury determination.

Accordingly, the Commission “properly considered and discounted

the opposition to the petition,”18 and it is not the province of

17
(See Def.-Intervenor’s Mem. 20 (“Both domestic coaters
and three converters supported the petition, and together they
represent [[ ]] the LWTP production performed by
the domestic industry. In addition to the three supporting
converters, [[
]].” (citing Comm’n Views
(Conf.) at 13 n.46, 67 n.261 [Comm’n Views at 9 n.46, 39 n.261];
Comm’n Final Staff Report (Conf.) at III-3 Table III-1
(identifying each industry member’s position on the petition),
III-5 Table III-2 (identifying coaters’ production values), III-7
Table III-4 (identifying converters’ production values), III-8
Table III-5 (identifying production values of supporting
converters))).)
18
See Tropicana Prods., 31 CIT at __, 484 F. Supp. 2d at
1348 (explaining that in Citrosuco Paulista, S.A. v. United
States, 12 CIT 1196, 1216-17, 704 F. Supp. 1075, 1093 (1988),
Court No. 08-00430 Page 21

this court to “reweigh the evidence or substitute its judgment

for that of the ITC.” Goss Graphics, 22 CIT at 1008-09, 33 F.

Supp. 2d at 1104 (citations omitted).

B. Consideration of 48 Gram Product Included in Commerce’s
Published Margin

Next, Plaintiffs contend that the Commission erred by not

removing Koehler’s 48 gram product from its threat of material

injury analysis, arguing that “Koehler submitted [to the

Commission] the record from the Commerce investigation showing

. . . that none of Koehler’s 48-gram product was dumped” (Pls.’

Mem. 16 (emphasis omitted) (citing Papierfabrik August Koehler AG

& Koehler America, Inc. Post Hr’g Br. (Final), Admin. R. Con.

Doc. 490, at [6-7], Ex. H19)) and that “it is vital that the

Commission consider whether [] the allegedly threatening subset

of imports were in fact being dumped.” (Pls.’ Mem. 17.)20 In

“the Commission expressly found that the processors opposing the
petition were more dependent upon [subject] imports than those
supporting the petition,” and that “[t]he court affirmed the
determination”).
19
At oral argument, Plaintiffs’ counsel informed the court
that the evidence allegedly showing that none of Koehler’s
48 gram product was dumped is actually included in Koehler &
Mitsubishi HiTec Prehr’g Br. (Final), Admin. R. Con. Doc. 460,
Ex. 13. This confusion further emphasizes the uncertainty with
regard to the factual basis underlying Plaintiffs’ argument.
20
In making this argument, Koehler omits to note that the
exhibit it submitted was only for calculating an estimated
margin, see 19 U.S.C. § 1673d(c)(1)(B)(i)(I), for Koehler’s sales
during Commerce’s period of investigation. See Commerce Final
Court No. 08-00430 Page 22

support of their argument, Plaintiffs point to the language of

the antidumping statute,21 the legislative history to the Uruguay

Round Amendments Act,22 the Federal Circuit’s decision in Gerald

Metals, 132 F.3d 716,23 the Commission’s own policy of removing

from its analysis companies individually found to have had zero

Determination,73 Fed. Reg at 57,327.
21
(See Pls.’ Mem. 17-18 (quoting 19 U.S.C. § 1677(7)(F)(ii)
(characterizing the Commission’s determination as “whether
further dumped or subsidized imports are imminent” (emphasis
added))).) Plaintiffs argue that because “Congress included
specific language in one section of [the] law [19 U.S.C.
§ 1677(7)(F)(i)] but omitted it from another, related section of
the same law [19 U.S.C. § 1677(7)(F)(ii)]” (Pls.’ Reply 13), the
court should “presume that the use of the term [d]umped imports
[in 19 U.S.C. § 1677(7)(F)(ii)] rather than [s]ubject imports was
deliberate.” (Id.) Because Congress could have said ‘subject
imports’ but said ‘dumped imports,’ Plaintiffs contend that
“Congress did not intend the term [dumped imports] to have the
same meaning as [s]ubject imports.” (Id. at 14 (emphasis
omitted).)
22
(See Pls.’ Mem. 18 (quoting H.R. Rep. No. 103-826, pt. 1,
at 854 (1994) (excerpt from Statement of Administrative Action,
explaining that changes to the portion of the antidumping statute
dealing with determinations of threat of material injury were
made “to track more closely the language contained in Articles
3.7 and 15.7 of the [Uruguay Round] Agreements requiring that
further dumped or subsidized imports be ‘imminent’ and that
‘material injury would occur’ absent relief” (emphasis added)).)
23
(See Pls.’ Mem. 19 (quoting Gerald Metals, 132 F.3d at
723 (“[P]roper consideration of the effect of fairly-traded
imports on the domestic market . . . is also necessary to assess
whether the dumping duties are remedial rather than
punitive.”)).)
Court No. 08-00430 Page 23

or de minimis dumping margins,24 as well as the Federal Circuit’s

decision in Algoma Steel Corp. v. United States, 865 F.2d 240

(Fed. Cir. 1989).25

As the court will explain below, however, because a

reasonable reading of the record on this issue supports the

Commission’s factual conclusions, and because the legal framework

within which those factual conclusions have been made is

sufficiently clear and established, the court need not resolve

any potential tension between the parties’ competing legal

positions on this issue.

First, the Commission is presumed to have considered all of

the evidence before it. See Gonzales v. West, 218 F.3d 1378, 1381

(Fed. Cir. 2000) (“[A]bsent specific evidence indicating

otherwise, all evidence contained in the record at the time of

the [agency]'s determination . . . must be presumed to have been

reviewed by [the agency], and no further proof of such review is

24
(See Pls.’ Mem. 20 (citing Wooden Bedroom Furniture from
China, USITC Pub. 3743, Inv. No. 731-TA-1058 (Final) (Dec. 2004),
at IV-18 Table IV-8; Certain Cut-to-Length Steel Plate from
France, India, Indonesia, Italy, Japan, and Korea, USITC
Pub. 3273, Inv. Nos. 701-TA-387-391 (Final) and 731-TA-816-821
(Final) (Jan. 2000), at 22 n.122).)
25
(See Pls.’ Mem. 21 (citing Algoma Steel, 865 F.2d at 242-
43 (explaining that “there is no per se rule either way” with
respect to the issue of whether the Commission must consider a
computer printout from Commerce showing that only half of a
company’s individual sales were at LTVF).)
Court No. 08-00430 Page 24

needed.” (citations omitted)); Suramerica, 17 CIT at 164, 818 F.

Supp. at 365 (quoting Rhone Poulenc, S.A. v United States, 8 CIT

47, 55, 592 F. Supp. 1318, 1326 (1984)). The Commission’s

decision not to give more weight to the Plaintiffs’ particular

piece of evidence, in light of Commerce’s finding of dumping for

the class of Plaintiffs’ merchandise, was not unreasonable on the

record here. Accord Algoma Steel, 865 F.2d at 242 (“[I]t is not

arbitrary, capricious, or contrary to law for the ITC to refuse

to consider a computer printout showing the breakdown of

[specific] sales during a six-month period between LTFV and [more

than fair value] sales [‘MTFV’].”).

The Algoma Steel court also opined that “[t]his is not to

say that a similar printout might not justify consideration if

the raw data were supported by reasons specific to the particular

case, why sales at MTFV were not relevant to the injury

determination.” Id. But Plaintiff makes no demonstration of

reasons specific to this case why the alleged MTFV sales are not

relevant here. To the contrary. Here the agency concluded, as

noted above, that Plaintiff’s “lower-priced imports of 48 gram

jumbo rolls . . . will begin to have significant price effects on

domestically produced 55 gram jumbo rolls.” Comm’n Views at 38.

Plaintiff does not challenge this conclusion. Thus, contrary to

Plaintiff’s claim, the 48 gram jumbo rolls are directly relevant
Court No. 08-00430 Page 25

to the ITC’s finding of a threat of material injury.

Second, the problem with Plaintiffs’ legal argument is that

the statute requires that the Commission’s threat of material

injury determination must be based on a finding that the threat

to relevant domestic industry is by reason of imports “of the

subject merchandise.” 19 U.S.C. § 1677(7)(F)(i) (emphasis

added).26 The statute defines “subject merchandise” as “the class

or kind of merchandise that is within the scope of an

investigation[] . . . .” 19 U.S.C. § 1677(25). “The ITC may not

modify the class or kind of imported merchandise examined by

26
Plaintiffs are correct in interpreting the antidumping
statute to require the Commission, in an appropriate case, to
differentiate between dumped and fairly traded merchandise. See
Bratsk Aluminium Smelter v. United States, 444 F.3d 1369, 1373
(Fed. Cir. 2006); Gerald Metals, 132 F.3d at 723. This, however,
is not such a case. The issue presented here differs from that
addressed by the Federal Circuit in Bratsk, where the court held
that “[w]here commodity products are at issue and fairly traded,
price competitive, non-subject imports are in the market, the
Commission must explain why the elimination of subject imports
would benefit the domestic industry instead of resulting in the
non-subject imports’ replacement of the subject imports’ market
share without any beneficial impact on domestic producers.”
Bratsk, 444 F.3d at 1373 (emphasis added). In this case, there
were no fairly traded non-subject imports competing with the
relevant domestic products: “During the [POI], the domestic
industry and the subject imports supplied virtually the entire
U.S. LWTP market. . . . [T]he domestic industry supplies both
jumbo rolls and slit rolls of LWTP, subject imports from China
are exclusively slit rolls, and subject imports from Germany are
exclusively jumbo rolls.” Comm’n Views at 16. See also Comm’n
Views (Conf.) at 25 (“Nonsubject imports supplied a very small
share of the market, never accounting for more than [[ ]]
percent of apparent U.S. consumption at any point during the
[POI].”).
Court No. 08-00430 Page 26

Commerce.” USEC Inc. v. United States, 34 F. App’x 725, 730 (Fed.

Cir. 2002); see also Algoma Steel Corp. v. United States, 12 CIT

518, 522, 688 F. Supp. 639, 644 (1988) (“In applying [the

antidumping] statute, ITC does not look behind [Commerce]’s

determination, but accepts [Commerce]’s determination as to which

merchandise is in the class of merchandise sold at LTFV.”), aff’d

865 F.2d 240 (Fed. Cir. 1989); Nippon Steel, 458 F.3d at 1350

(“Congress created a highly specialized system for resolving

antidumping allegations, which recognizes and exploits each

participant's area of expertise.”).

By statute, therefore, the Commission is required to make a

determination of whether an industry in the United States is

threatened with material injury “by reason of imports . . . of

the merchandise with respect to which [Commerce] has made an

affirmative determination under [19 U.S.C. § 1673d(a)(1)].”

19 U.S.C. § 1673d(b)(1). For purposes of this section, a

“determination” of Commerce under section 1673d(a)(1) is the

final determination published in the Federal Register. See id.

§ 1673d(d).

In this case, the Department of Commerce, exercising its

authority under 19 U.S.C. § 1673d(a)(1), “determined that imports

of [LWTP] from Germany are being, or are likely to be, sold in

the United States at [LFTV].” Commerce Final Determination,
Court No. 08-00430 Page 27

73 Fed. Reg. at 57,326. Commerce did not differentiate among the

various products included within the scope of the subject

merchandise – LWTP – and published a single weighted-average

dumping margin for the entire class. Id. at 57,327-28. Indeed,

the Department specifically stated that:

As [Commerce’s] final determination is affirmative and
in accordance with section 735(b)(2) of the Act
[19 U.S.C. § 1673d(b)(2)], the ITC will determine . . .
whether the domestic industry in the United States is
. . . threatened with material injury, by reason of
imports or sales (or the likelihood of sales) for
importation of the subject merchandise. If the ITC
determines that such injury does exist, the Department
will issue an antidumping duty order directing [United
States Customs and Border Protection] to assess
antidumping duties on all imports of the subject
merchandise . . . .

Id. at 57,328 (emphasis added).

Accordingly, contrary to Plaintiffs’ assertions, the

Commission properly included all merchandise within the class of

merchandise determined by Commerce to have been sold at LTFV

within the scope of its threat of material injury determination.

Accord Algoma Steel, 12 CIT at 522, 688 F. Supp. at 644.27

27
See also Sony Corp. of Am. v. United States, 13 CIT 353,
360, 712 F. Supp. 978, 984 (1989) (“Because [the relevant]
imports were part of the class or kind of merchandise for which
Commerce had made an affirmative determination, the Commission
was required to include such imports in its injury investigation.
As noted in Algoma[,] . . . in applying 19 U.S.C. § 1673 ITC does
not look behind [Commerce]’s determination as to which
merchandise is in the class of merchandise sold at LTFV.”
(alteration and quotation marks and citation omitted)); USEC,
Inc. v. United States, 25 CIT 49, 56, 132 F. Supp. 2d 1, 8 (2001)
Court No. 08-00430 Page 28

Plaintiffs place significant weight upon the evidence that

they claim shows that some particular subset of sales were found

by Commerce not to have been dumped. However, as Defendant

points out, if Commerce’s final weighted-average dumping margin

for the entire class of subject merchandise may be too high for

some set of sales, it is conversely too low for others.28 Accord

Algoma Steel, 865 F.2d at 241 (“Commerce, determining that sales

at LTFV have occurred, normally . . . states a ‘dumping margin’

which is a weighted average adjusting appropriately for the MTFV

sales.”). Moreover, Plaintiffs’ argument seeks to isolate one

alleged component of the data from Commerce’s record, ignoring

the other factors that contribute to Commerce’s affirmative

dumping determination with respect to the entire class of subject

imports.

The thrust of Plaintiffs’ argument appears to be that

Koehler’s 48 gram product should have been excluded from

(quoting Algoma for proposition that the Commission does not look
behind Commerce’s determination as to which merchandise is in the
class of merchandise sold at LTFV); Goss Graphics, 22 CIT at 995,
33 F. Supp. 2d at 1093 (same).
28
(See Def.’s Mem. 18 n.8 (“[A]s a logical matter,
accepting Koehler’s argument that imports in discrete non-dumped
transactions are ‘fairly traded’ would change the margin for the
remaining imports, those Koehler presumably deems to be ‘dumped.’
The applicable margin for the imports Koehler would deem to be
‘dumped’ would be higher than the margin published by Commerce.
(This is because the amount of dumping would be no lower, but the
volume of imports in dumping transactions would be reduced.)”).)
Court No. 08-00430 Page 29

Commerce’s dumping determination, but if Plaintiffs believed that

the assessed 6.5% dumping margin failed to accurately reflect

their pricing practices, or that 48 gram LWTP should have been

excluded from the scope of subject merchandise, this is a matter

that should have been taken up in a challenge of that

determination under 19 U.S.C. § 1516a(a)(2)(B)(i). Plaintiffs

have failed to do so,29 and the Commission did not err in

considering within the scope of its threat of material injury

determination the entire class of subject merchandise for which

Commerce published an affirmative dumping determination.30

29
19 U.S.C. § 1516a(a)(2)(A)(i)(II) requires that such
challenge be brought within thirty days of the date of
publication of the antidumping duty order in the Federal
Register. Plaintiffs have missed that deadline.
30
Because the case law and past Commission practice cited
to by Plaintiffs in support of their arguments on this issue all
involved situations where, unlike here, Commerce published zero
or de minimis margins, they do not affect the analysis in this
case. The court notes that there is no tension between the
Commission’s practice of excluding companies for which Commerce
has published zero or de minimis margins from its injury analysis
and the Commission’s position that it is not required to look
behind Commerce’s final dumping determination in this case –
where, unlike here, Commerce itself has published zero or de
minimis margins as part of its final determination, the
Commission may exclude such companies from its investigation
without supplanting Commerce’s own analysis.
Neither is the court’s reasoning affected by, as Plaintiffs
suggest, recasting the inquiry as one of causation. (See Pls.’
Reply 10.) The requirement that the Commission provide a showing
of causal connection between the LTFV merchandise and the threat
of injury is derived from language in the statute mandating that
the threat be “by reason of imports . . . of the merchandise with
respect to which [Commerce] has made an affirmative determination
Court No. 08-00430 Page 30

C. Likelihood of Increase in German LWTP Imports

1. Determination of Likely Further Product-Shifting

Plaintiffs next argue that the Commission relied on

conclusions based on mere conjecture or supposition in making its

determination that German producers are likely to increase

imports to the United States in the immediate future. (Pls.’ Mem.

26-31; Pls.’ Reply 18-23.) Plaintiffs argue that the

Commission’s extrapolation of trends observed during the POI –

when German producers “were able to increase capacity through a

combination of achieving greater efficiencies and using capacity

previously devoted to producing other products to produce LWTP

instead,” Comm’n Views at 36 – was not supported by substantial

evidence. Plaintiffs contend that “[t]he German producers’

inability to prove the negative [i.e., that trends observed

during the POI would not continue] . . . does not constitute

substantial evidence on the record.” (Pls.’ Mem. 27.)

Contrary to Plaintiffs’ assertions, however, the Commission

properly considered the potential for product-shifting as part of

its determination with respect to the likelihood of increased

subject imports, see 19 U.S.C. § 1677(7)(F)(i)(VI) (listing “the

potential for product-shifting” among factors that the Commission

under [19 U.S.C. § 1673d(a)(1)],” 19 U.S.C. § 1673d(b)(1); see
Gerald Metals, 132 F.3d at 720 – in this case, the entire class
of subject merchandise.
Court No. 08-00430 Page 31

is required to consider in its threat of material injury

analysis), and properly employed a ‘trend’ analysis to

extrapolate to the near future trends observed during the POI.

See Asociacion de Productores de Salmon y Trucha de Chile AG v.

U.S. Int’l Trade Comm’n, 26 CIT 29, 38, 180 F. Supp. 2d 1360,

1370 (2002) (“The Court of International Trade has previously

approved such a ‘trend’ analysis as reasonable.” (citing Bando

Chemical Industries, Ltd. v. United States, 17 CIT 798, 807

(1993), aff’d, 26 F.3d 139 (Fed. Cir. 1994); Iwatsu Elec. Co. v.

United States, 15 CIT 44, 55, 758 F. Supp. 1506, 1515-16

(1991))). The record as a whole demonstrates that product-

shifting in fact occurred to a significant degree during the POI,

Comm’n Views at 36, whereas, as the Commission pointed out,

“[t]he record contains no indication that the German producers

cannot continue to increase capacity through such means in the

imminent future.” Id.

Again, “[b]ecause of th[eir] expertise, Commissioners are

the factfinders in the material injury determination: ‘It is the

Commission’s task to evaluate the evidence it collects during its

investigation.’” Nippon Steel, 458 F.3d at 1350 (quoting U.S.

Steel Group v. United States, 96 F.3d 1352, 1357 (Fed. Cir.

1996)). On the record before the court, the Commission’s

projections based on product-shifting trends observed during the
Court No. 08-00430 Page 32

POI are reasonable.

2. Effect of Appleton’s New West Carrollton Facility

Plaintiffs also contend that the Commission’s determination

of a likely increase in German subject imports “is further

contradicted by substantial evidence on the record showing that

product entering the market from Appleton’s new West Carrollton

facility will result in increased U.S. shipments and decreased

German shipments.” (Pls.’ Mem. 27.) Plaintiffs argue that the

Commission “implicitly conclude[d], without any basis, that

German producers would continue an endless upward trajectory in

exports to the United States in the face of not only a projected

slowdown in U.S. demand, but also a [significant] increase in

Appleton’s coating capacity.” (Id. 30.)

Again, the Commission is presumed to have considered all of

the evidence before it. Gonzales, 218 F.3d at 1381; Suramerica,

17 CIT at 164, 818 F. Supp. at 365. Further, as reflected in the

Commission’s extensive discussion of Appleton’s new West

Carrollton facility throughout its opinion, as well as the

crucial role played by this factor in supporting the Commission’s

affirmative threat of injury determination, notwithstanding its

negative present injury determination, see Comm’n Views at 38-39,

it is clear that the Commission considered the effect of this new

facility in reaching its conclusions.
Court No. 08-00430 Page 33

As noted above, unless the presence of this evidence in the

record creates a situation where only one reasonable conclusion

can be drawn, see Gerald Metals, 132 F.3d at 720, the fact that

Plaintiffs can interpret the evidence in a way contrary to the

interpretation reached by the Commission does not make the

Commission’s determination unsupported by substantial evidence.

See Consolo, 383 U.S. at 620; Matsushita Elec. Indus. Co. v.

United States, 750 F.2d 927, 936 (Fed. Cir. 1984). Here, a

reasonable reading of the record permits the conclusion that the

product-shifting trends experienced during the POI were likely to

continue in the near future and that these trends would not be

negated by Appleton’s increased capacity at West Carrollton,

because the new facility’s effect on domestic production would be

moderated.31 The record also evidences that demand would continue

to grow. See Comm’n Views at 14-15. Accordingly, the record does

not point to only one reasonable conclusion, and it is once more

not the province of this court to re-weigh the evidence that the

Commission alone is, in its expertise, entrusted to consider and

31
(See Def.’s Mem. 36 (“Koehler mistakenly assumes that
Appleton’s capacity would increase commensurately with the
increase in capacity at West Carrollton. In fact, Appleton
planned to [[
]].”(citing
Appleton Papers Inc. U.S. Producers’ Questionnaire (Final),
Admin. R. Con. Doc. 367 (“Appleton Questionnaire”), Ex. [1] at
45-46)).)
Court No. 08-00430 Page 34

weigh. See Nippon Steel, 458 F.3d at 1350.

3. Effect of Koehler’s Plan to Open a New U.S. Facility in
2010

Finally, Plaintiffs contend in this regard that the

Commission’s conclusion that Koehler’s plans to open a new

coating facility in the United States in 2010 provide an added

incentive for Koehler to increase its presence in the U.S. market

in the interim (i.e., imminent future) is also based on

conjecture. (Pls.’ Mem. 30.) Plaintiffs argue that the

Commission “provide[s] not a shred of support in the record for

this assumption, and indeed it is contradicted by Koehler’s own

business plans, and rendered highly implausible by the massive

increase in capacity that came online in August 2008 from

Appleton’s West Carrollton facility.” (Id. 30-31.)

Defendant responds that the Commission’s decision not to

rely on Koehler’s own business plans was within the Commission’s

discretion. (Def.’s Mem. 30.)32 In supporting its decision to

32
The Defendant cites Salmon y Trucha, 26 CIT at 37-38,
180 F. Supp. 2d at 1370 (Commission acted reasonably in not
relying principally on data furnished by respondents projecting
capacity declines); Companhia Paulista de Ferro-Ligas v. United
States, 20 CIT 473, 484-85 (1996) (Commissioner acted reasonably
by not relying on respondent’s projections when they were
inconsistent with historical pattern of conduct and could not be
reconciled with other evidence)). (Def.’s Mem. 30-31.) See also
Def.-Intervenor’s Mem. 23 (citing Geo Specialty Chems., Inc. v.
United States, No. 08-00046, 2009 WL 424468, at *6 (CIT Feb. 19,
2009) (approving the Commission’s rejection of “foreign
producers’ projections that imports would decrease”).
Court No. 08-00430 Page 35

disregard Plaintiffs’ projections, Defendant points to what it

perceived as internal inconsistencies within Koehler’s business

plan.33 Further, Defendant notes that “Koehler’s business plan

attributed likely export declines in part to a consideration

whose importance a Koehler official downplayed in sworn testimony

[before the Commission]” (id. 32), and that this “also provided a

basis for [the] Commission’s decision not to give weight to the

projected declines.” (Id.) Thus, Defendant argues that:

the Commission reasonably concluded that Koehler would
not voluntarily retreat from the U.S. market during the
year it was building its new facility, thereby
surrendering market share to Appleton. To the
contrary, the Commission’s conclusion that Koehler’s
projected U.S. facility provided it with an incentive
to increase its presence in the U.S. market was
entirely consistent with the thrust of the Koehler
business plan.

(Id. 31.)

Defendant-Intervenor further argues that “the incentive to

33
(See Def.’s Mem. 31 (“On the one hand, [Koehler]
projected [[ ]].
On the other, it [[

]].” (citing
Papierfabrik August Koehler AG Foreign Producers’ Questionnaire,
Admin. R. Con. Doc. 525, Attach. 3 at 6, 10)); see also Def.-
Intervernor’s Mem. 24 (noting that while Koehler asserted that
“‘it had [[ ]],’ [] the Commission observed that
Koehler [[

]].” (quoting
Comm’n Views (Conf.) at 61 n.239)).)
Court No. 08-00430 Page 36

build customer relationships and product acceptance in advance of

constructing a production facility is a reasonable presumption.”

(Def.-Intervenor’s Mem. 27 (quoting Nippon Steel Corp. v. United

States, 19 CIT 450, 480 (1995) (“Once purchasers have an

established supply relationship, the established supplier has an

advantage, and the competing supplier is forced to beat the

import price, probably by a substantial margin.”)).)

With respect to this issue, Plaintiffs again essentially ask

the court to re-weigh the evidence before the Commission, which

the court must again decline to do. As noted above, the

Commission reasonably concluded, based on the record before it

that, in light of trends experienced during the POI, subject

German imports are likely to continue to increase in the

immediate future. Because it is not unreasonable for the

Commission to have concluded “that Koehler would not voluntarily

retreat from the U.S. market during the year it was building its

new facility” (Def.’s Mem. 31), the court cannot agree that

Plaintiffs’ interpretation of the effect of Koehler’s plans to

open a new U.S. facility is the only reasonable interpretation.

See Gerald Metals, 132 F.3d at 720. Accordingly, the court

cannot agree that the Commission’s determination is unsupported

by substantial evidence.
Court No. 08-00430 Page 37

D. Likely Price Effects Determination

The Commission generally defends its determination of likely

price effects as based on two unchallenged findings. First, the

Commission determined that the 48 gram product, as opposed to the

55 gram product, “would be the focus of competition between the

domestic like product and the subject imports in the imminent

future” (Def.’s Mem. 33); see also Comm’n Views at 38, and,

second, that “the subject imports from Germany [tended to

undersell] the domestically produced 48 gram product during the

[POI].” (Def.’s Mem. 33.)34 Defendant explains that “[t]he

Commission consequently concluded that the [price differential]

observed for the 48 gram product during the [POI] was likely to

continue in the imminent future, and that it would impede the

domestic industry’s attempts to gain or maintain sales of that

product.” (Id.)

Plaintiffs maintain that the Commission should have instead

concluded that, regardless of any price effects from increased

subject imports from Germany, Appleton would lower its prices, as

purportedly evidenced by (1) Appleton’s business plan, and (2)

34
(See Def.’s Mem. 33 (noting that subject imports from
Germany “[[ ]] the domestically produced 48
gram product during the [POI]); see also Comm’n Views (Conf.) at
53 (“The [48 gram] subject imports [from Germany] undersold the
domestically produced product in [[ ]] quarterly
comparisons.” (citation omitted)).)
Court No. 08-00430 Page 38

basic laws of supply and demand. The court will consider each of

these arguments in turn.

1. Likelihood of Lower Domestic Prices Based on Appleton’s
Business Plan

Plaintiffs first argue that the Commission’s finding of

likely price effects is unsupported by substantial evidence by

asserting that the Commission unreasonably failed to conclude

from the record that Appleton’s new West Carrollton facility was

intended to allow Appleton to cut its prices on 48 gram LWTP,

thereby preempting any price effects from cheaper German

products. (See Pls.’ Mem. 31-33.) Specifically, Plaintiffs

contend that Appleton’s business plan, “the only contemporaneous

documentation provided regarding the [West Carrollton] investment

decision (i.e., that was not prepared in the context of the

investigation)” (Pls.’ Mem. 32) supports the conclusion that

Appleton intended to cut prices once the new facility was up and

running.35

35
(See Pls.’ Mem. 33 (“[[

]]” (emphasis
omitted)).)
Court No. 08-00430 Page 39

Defendant contests Plaintiffs’ interpretation of Appleton’s

business plan,36 and argues that the Commission’s alternative

reading of this plan “was consistent with the public testimony of

Appleton’s Chief Executive Officer that Appleton’s decision to

invest in its West Carrollton’s facilities was based on the

pricing and demand conditions that existed when the investment

decision was made in 2006, and that subsequent pricing declines

imperiled that investment.” (Def.’s Mem. 35 (citing Transcript of

Open Session of Comm’n Hr’g held on Oct. 2, 2008 (Revised and

Corrected Copy), Admin. R. Pub. Doc. 258, at 58-60).) Finally,

Defendant asserts that Plaintiffs “point[] to nothing in the

record indicating that Appleton was making any profit from LWTP

production at its [n]ew [West] Carrollton facility, much less

that its production was so profitable that it would have an

36
(See Def.’s Mem. 35 (“The Commission found, and Koehler
concedes, that the Appleton business plan projected [[

]]. The Commission
further found, and Koehler does not contest, that the prices
Appleton charged for the [[

]]. Consequently, Appleton’s projections in its
business plan [[
]], than the most recent prices in the
record before the Commission.” (citing Comm’n Views (Conf.) at 65
n.257; Appleton Questionnaire, Ex. [1] at 43; Pls.’ Mem. 33)).)
Court No. 08-00430 Page 40

incentive to cut prices.” (Id. at 35-36 (emphasis omitted)).37

The Defendant is correct. There is nothing manifestly

unreasonable about the Commission’s reading of Appleton’s

business plan and its reliance on testimony from Appleton’s Chief

Executive Officer. The Commission’s reasoning with respect to

its likely price effects determination – that, unlike the

situation during the POI, the 48 gram product rather than the 55

gram product will be the focus of competition between subject

German imports and domestic producers, and that, given trends

seen during the POI, the 48 gram product from Germany will likely

undersell domestically produced 48 gram product, see Comm’n Views

at 32, 37-39 – is also not unreasonable on the evidence before

it.

2. Likelihood of Lower Domestic Prices Based on Increased
Domestic Supply

In support of their challenge to the Commission’s finding of

likely price effects, Plaintiffs further argue that basic

economic principles of supply and demand also support a

conclusion from the record that Appleton would cut prices after

opening its new facility. (Pls.’s Mem. 33-36.) Plaintiffs note

37
(See also id. at 36 (noting that “[t]he record[] . . .
indicates that Appleton had [[ ]] in
2006 on LWTP operations.”(citing Comm’n Final Staff Report
(Conf.) at VI-5-6; Certain Lightweight Thermal Paper from China
and Germany, Verification Report, Inv. Nos. 701-TA-451 and 731-
TA-1126-1127 (Final) (Oct. 7, 2008), Admin. R. Con. Doc. 486)).)
Court No. 08-00430 Page 41

that the Commission acknowledged Appleton’s projection that its

new facility “will increase its capacity of the subject product”

(id. 31 (quoting Comm’n Final Staff Report (Conf.) at III-4)) and

argue that “businesses simply do not spend $125 million to

increase capacity by [a significant] percent[age] without using

it” (id. 34), and that the resulting increase in quantity of the

48 gram product to be supplied to the market once Appleton’s new

facility is fully operational will naturally lower the market

equilibrium price, provided demand remains relatively unchanged.

(Id. 34-35.)

The record, however, does not require the conclusion that an

increase in domestic supply will negate the effect of German

underselling. Rather, available domestic supply is just one

factor in the Commission’s analysis, and it must be weighed

against the undisputed evidence of underselling by the German

producers. In addition, as mentioned above, the record

demonstrates that Appleton’s lack of profitability will militate

against price cuts. Contrary to Plaintiffs’ contention,

therefore, basic principles of supply and demand do not make the

Commission’s likely price effects determination unreasonable, and

the court concludes that this determination is supported by

substantial evidence. See Nippon Steel, 458 F.3d at 1351.
Court No. 08-00430 Page 42

E. Vulnerability of Domestic Industry

Finally, Plaintiffs argue that the Commission’s conclusion

that the domestic industry is vulnerable to the likely impact of

additional subject imports – based on the Commission’s finding

regarding “the consistently unprofitable financial performance of

the domestic industry during the [POI]” (Pls.’ Mem. 36 (quoting

Comm’n Views at 39)) – is also unsupported by sufficient

evidence. Plaintiffs once more in effect request the court to

re-weigh the evidence that the Commission alone is authorized and

entrusted to gather, consider, and weigh in coming to its threat

of injury determination. (See id. 36-38.)

As evidenced by the citations supplied in its Views, the

Commission’s finding that “[o]verall domestic industry financial

performance declined [during the POI]” is supported by

substantial evidence. See Comm’n Views at 26. (See also Def.’s

Mem. 37-38 (“An examination of the combined operations of all

U.S. coaters and converters of LWTP demonstrates [that] . . .

[c]oaters and converters combined had operating losses of $1.0

million in 2005, $93,000 in 2006, $11.2 million in 2007, $3.6

million in interim 2007, and $6.5 million in interim

2008,”(citing Comm’n Final Staff Report (Conf.) at VI-4 Table VI-

3)).) Accordingly, the Commission’s finding that “[i]n light of

the consistently unprofitable financial performance of the
Court No. 08-00430 Page 43

domestic industry during the [POI], . . . the industry [is]

vulnerable to the effects of additional subject imports,” Comm’n

Views at 39 (footnote omitted), is also supported by substantial

evidence, particularly as the record does not indicate that

trends observed during the POI are likely to change in the

immediate future.

CONCLUSION

For all of the foregoing reasons, the Commission’s final

determination that a domestic industry is threatened with

material injury by reason of LWTP imports from Germany is

supported by substantial evidence. Plaintiffs’ Motion for

Judgment on the Agency Record is therefore DENIED, and the

Commission’s determination is AFFIRMED in all respects. Judgment

will issue for the Defendants.

/s/ Donald C. Pogue
Donald C. Pogue, Judge

Dated: November 17, 2009
New York, N.Y.