Slip Op. 07 - 106
UNITED STATES COURT OF INTERNATIONAL TRADE
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MITTAL STEEL POINT LISAS LIMITED, :
Plaintiff, :
v. :
Court No. 02-00756
UNITED STATES, :
Defendant, :
-and-
:
GERDAU AMERISTEEL CORP. et al.,
:
Intervenor-Defendants.
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Memorandum
[Results of remand to International Trade
Commission pursuant to mandate of Court of
Appeals for the Federal Circuit affirmed.]
Decided: July 6, 2007
Steptoe & Johnson LLP (Mark A. Moran, Matthew S. Yeo and
Evangeline D. Keenan) for the plaintiff.
James M. Lyons, General Counsel, Andrea C. Casson,
Assistant General Counsel, and Jonathon J. Englar, U.S.
International Trade Commission, for the defendant.
Kelley Drye Collier Shannon (Paul C. Rosenthal, Kathleen W.
Cannon and R. Alan Luberda) for the intervenor-defendants.
AQUILINO, Senior Judge: Before this court are the
January 16, 2007 Views of the U.S. International Trade
Court No. 02-00756 Page 2
Commission (“ITC”)1 issued pursuant to the order of remand filed
herein, 30 CIT ___, Slip Op. 06-151 (Oct. 13, 2006), in
conformity with the mandate of the U.S. Court of Appeals for the
Federal Circuit (“CAFC”) that the commissioners
“make a specific causation determination and in that
connection . . . directly address whether [other LTFV
imports and/or fairly traded imports] would have
replaced [Trinidad and Tobago’s] imports without any
beneficial effect on domestic producers.”
Caribbean Ispat Ltd. v. United States, 450 F.3d 1336, 1341
(Fed.Cir. 2006), quoting from Bratsk Aluminum Smelter v. United
States, 444 F.3d 1369, 1375 (Fed.Cir. 2006). These Views report
that,
[u]pon consideration of the court’s remand
instructions, we determine . . . that an industry in
the United States is not materially injured or
threatened with material injury by reason of imports
of certain wire rod from Trinidad and Tobago that is
sold in the United States at less than fair value
(“LTFV”).2
* * *
2
Commissioners Stephen Koplan and Charlotte R.
Lane dissent, but join in Sections I, II and III of
these remand views. As further set forth in their
Separate and Dissenting Views, they find that an
industry in the United States is materially injured by
reason of subject imports from Trinidad and Tobago.
1
These Views will be cited hereinafter as “Remand Results”.
Court No. 02-00756 Page 3
Counsel for the U.S. domestic industry respond herein
to these Views, in part, as follows:
In sum, the Commission has clearly indicated its
belief that the appellate court’s holdings in both
Bratsk and Caribbean Ispat are contrary to law, a
conclusion with which the domestic producers concur.
Despite or perhaps because of this disagreement, the
Commission has adopted an extreme interpretation of
the Court’s holding, including reliance on a
commodity-product finding the appellate court did not
make, reliance on a rebuttable presumption the
appellate court did not require, cumulation of all
imports in its replacement analysis, a presumption
that replacement of imports automatically negated
benefits, and finally extension of the
replacement/benefit test to the threat context. The
result of this extreme interpretation of the Bratsk
decision was to deprive the domestic industry of an
antidumping duty order against Trinidad that the
Commission believes should lawfully remain in effect.
Defendants-Intervenors’ Comments, p. 26.
This court accepts this response as a plea for relief
from the above-quoted controlling viewpoint, but its consid-
eration thereof is circumscribed by the CAFC’s specific mandate.
See, e.g., Briggs v. Pennsylvania R.R. Co., 334 U.S. 304, 306
(1948), citing Himley v. Rose, 9 U.S. (5 Cranch) 313 (1809).
I
The ITC is required to make a final determination of
whether a domestic industry is materially injured, or is
threatened with material injury, by reason of imports, or sales
Court No. 02-00756 Page 4
(or likelihood of sales) for importation. 19 U.S.C.
§1673d(b)(1). It is well-established that an affirmative
determination entails two elements: present material injury, or
threat thereof, and a finding that that material injury is “by
reason of” subject imports. See, e.g., Gerald Metals, Inc. v.
United States, 132 F.3d 716, 719 (Fed.Cir. 1997); Chaparral
Steel Co. v. United States, 901 F.2d 1097, 1104 (Fed.Cir. 1990);
American Spring Wire Corp. v. United States, 8 CIT 20, 22-23,
590 F.Supp. 1273, 1276 (1984), aff’d sub nom. Armco, Inc. v.
United States, 760 F.2d 249 (Fed.Cir. 1985).2 In making such
determinations, the Commission is required by 19 U.S.C.
§1677(7)(B)(i) to consider
(I) the volume of imports of the subject
merchandise,
(II) the effect of imports of that merchandise on
prices in the United States for domestic like
products, and
(III) the impact of imports of such merchandise on do-
mestic producers of domestic like products . . ..
Additionally, it “may consider such other economic factors as
are relevant to the determination regarding whether there is
2
This matter focuses at this time on the second element,
i.e., whether the domestic producers’ present material injury
has been “by reason of” subject imports from the Republic of
Trinidad and Tobago (“RTT”).
Court No. 02-00756 Page 5
material injury by reason of imports.” 19 U.S.C. §
1677(7)(B)(ii).
The subject imports at issue in this case are steel
wire rods produced in RTT, a designated beneficiary country
under the Caribbean Basin Economic Recovery Act (“CBERA”). That
act, the purpose of which is to “promote economic revitalization
and facilitate expansion of economic opportunities in the
Caribbean Basin region,” Pub. L. No. 98-67, 97 Stat. 384 (Aug. 5,
1983), modifies otherwise applicable 19 U.S.C. §1677(7)(G)(i),
which requires the ITC to “cumulatively assess the volume and
effect of imports of the subject merchandise from all countries”
with respect to which petitions were filed or investigations
initiated on the same day and such imports compete with each
other and with domestic like products in the U.S. market. In
making an injury determination with regard to imports from a
CBERA designated nation, however, the Commission may assess the
volume and effect of imports cumulated only with imports of the
subject merchandise from other such designated beneficiary
countries. See 19 U.S.C. §1677(7)(G)(ii)(III).
A
In its original motion for judgment upon the agency
record, the plaintiff claimed that the ITC majority failed to
Court No. 02-00756 Page 6
“ensure that imports from Trinidad and Tobago by themselves made
a material contribution to any injury to the domestic industry”
and that the Commission “failed to explain how it ensured that
it was not attributing . . . injury from th[o]se other known and
potential sources of injury (e.g., other subject and non-subject
imports)”. The plaintiff proposed that this court order the
defendant to
provide an adequate explanation as to how it ensured
that it did not attribute the effects of other subject
and non-subject imports to imports from the Republic
of Trinidad and Tobago[.]
According to the Uruguay Round Agreements Act
Statement of Administrative Action (“URAA-SAA”), in performing
its “by reason of” analysis, the ITC should
examine all relevant evidence, including any known
factors, other than dumped [or subsidized] subject
imports which at the same time are injuring the
domestic industry[.]
Caribbean Ispat Ltd. v. United States, 29 CIT ___, ___, 366
F.Supp.2d 1300, 1305 (2005), quoting Defendant’s Opposition
Brief, p. 11, quoting H.R. Doc. No. 103-316, vol. 1, p. 851
(1994)(brackets in original). On plaintiff’s subsequent appeal,
however, the CAFC opined that reliance on this text read
too much into the URAASAA’s brief discussion of
causation. First, the passage does not speak to the
unique circumstances of CBERA or other non-cumulation
Court No. 02-00756 Page 7
provisions. Second, we do not regard the above-quoted
passage as Congress’s comprehensive and exclusive
interpretation of section 1677(7)(B)(ii). The passage
does not specifically reference that statute, and the
plain language of section 1677(7)(B)(ii) suggests a
broad grant of discretion in materiality
determinations that allows the Commission to “consider
such other economic factors as are relevant.” . . .
In the present case, the Commission had authority to
treat LTFV imports from non-CBERA countries as an
“other economic factor,” just as the Commission
ordinarily treats fairly traded imports as an “other
economic factor” in dumping investigations that do not
involve CBERA countries.
Caribbean Ispat Ltd. v. United States, 450 F.3d at 1339. Next,
the CAFC addressed a contention by the plaintiff/appellant that
legal error was committed by the ITC because it did not evaluate
the effect of RTT’s imports in light of other LTFV imports, and
its findings did not discuss the effect of fairly-traded
imports. The CAFC concurred with the contention – in the light
of its then-recent decision in Bratsk Aluminum Smelter v. United
States, supra, which explained 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.
450 F.3d at 1341, quoting 444 F.3d at 1373. Whereupon the
CAFC’s above-quoted mandate to this court and the Commission
issued.
Court No. 02-00756 Page 8
II
On remand, the ITC again finds that the “volume of
subject imports . . . is significant”3; that
there has been significant price underselling by
subject imports from Trinidad and Tobago as compared
with the price of domestic like product, and that the
effect of the subject imports was to prevent price
increases which otherwise would have occurred, to a
significant degree[;]4
that the subject imports from RTT “alone were having a
significant adverse impact on the domestic industry”5; and that
there was “a likelihood of continued imminent injury to the
domestic industry from subject imports from Trinidad and
Tobago”6. Nonetheless, two commissioners arrived at a negative
determination “solely as a consequence of [their] application of
the additional ‘replacement/benefit’ analysis set forth by the
[CAFC]”.7
3
Remand Results, p. 13.
4
Id. at 18.
5
Id. at 21.
6
Id. at 25.
7
Id. at 5 (emphasis added). Chairman Pearson did not
participate in the remand determination. Commissioner Okun’s
negative determination continues to be based on failure to find
significant volume or price effects from RTT subject imports.
See id. at 2 n. 3.
As recited above, Commissioners Koplan and Lane dissented,
(footnote continued)
Court No. 02-00756 Page 9
A
In applying the Bratsk analysis as laid out by the
CAFC, at least those two commissioners take the language “the
Commission must explain why the elimination of subject imports
would benefit the domestic industry” to be the court’s “creation
of a presumption in favor of finding replacement”, to wit:
. . . The effect of the replacement/benefit test
mandated by the Federal Circuit’s decision seems to
require the agency to render a negative determination,
if the triggering factors are satisfied, unless the
record contains substantial evidence that either non-
subject imports would not replace the subject imports
or that such replacement would nonetheless benefit the
domestic industry. This, in effect, requires proving
the negative. Put otherwise, it creates a rebuttable
presumption that replacement will occur.
Remand Results, p. 30. They go on to point out that the data
needed to rebut such a presumption would need to be obtained
from countries not under investigation, producers with no
incentive to provide the data needed. Indeed, such producers
would have incentive to withhold information as an antidumping-
finding that the first triggering factor for the
Bratsk “replacement/benefits” analysis is not present
in this remand determination. Therefore, they dissent
from any further analysis of Bratsk in this remand
determination.
Id. at 5 n. 11.
Court No. 02-00756 Page 10
duty order against the subject producers could be to their
economic advantage. See id. at 30-31. As for the intervenor-
defendants, they address this issue in the following manner:
Application of a rebuttable presumption against
the domestic industry, parties clearly not in
possession of information on foreign capacity,
pricing, etc., is unlawful. Longstanding case law
establishes that the “burden of production {belongs}
to the party in possession of the necessary
information.” Zenith Elecs. Corp. v. United States,
988 F.2d 1573, 1583 (Fed. Cir. 1993). See also Koyo
Seiko Co. v. United States, 92 F.3d 1162, 1166 (Fed.
Cir. 1996)(“The burden of production is appropriately
placed on the party deemed to control the
information.”). Further, the Commission is prohibited
from drawing adverse inferences – which it effectively
has done here against the U.S. producers – where
parties have not been shown to have failed to
cooperate to the best of their ability. See Shandong
Huarong Machinery Co., Ltd. v. United States, 435 F.
Supp. 2d 1261, 1272 (Ct. Int’l Trade 2006).
Defendants-Intervenors’ Comments, pp. 13-14.
Whatever the effect of compliance with the CAFC’s
mandate, this court cannot conclude that the commissioners
failed to address the question(s)8 imposed by it. But they do
8
As explained by the CAFC herein, a factor that triggers
Bratsk analysis is where “commodity products are at issue”. 450
F.3d at 1341, quoting 444 F.3d at 1373. What seemingly
(footnote continued)
Court No. 02-00756 Page 11
clearly state that the Bratsk test is “Unclear”9 and engenders
ambiguities [that] arise in large part because the
requirement imposed by the Bratsk panel . . . is not
among the statutory factors Congress has required the
Commission to consider. Indeed, such a test
misconstrues the purpose of the statute, which is not
to bar subject imports from the U.S. market or award
subject import market share to U.S. producers, but is
meant instead to “level[] competitive conditions” by
triggered the mandate of such analysis now is that court’s
recitation of the ITC’s finding of a
“high level of fungibility between subject imports
from Trinidad and Tobago and the domestic product, and
between subject imports from Trinidad and Tobago and
imports from each of the other subject countries.”
450 F.3d at 1341.
Whereupon two commissioners in the majority report that
they “feel constrained to interpret the Court’s ruling broadly
for purposes of satisfying the Court’s remand in this case” and
thus “conclude that this ‘antidumping investigation is centered
on a commodity product’ that is ‘generally interchangeable
regardless of its source.’” Remand Results, p. 36 (footnote
omitted). The dissenting opinion of two other commissioners
states, on the other hand, that
the domestic like product, subject imports, non-
Trinidadian subject imports, and non-subject imports
of wire rod are not “generally interchangeable
regardless of its source” and consequently are not
commodity products for purposes of the Bratsk
analysis. [He]nce this threshold Bratsk triggering
factor is not met[.]
Id. at 50. See also footnote 7, supra.
9
Id. at 27 (boldface in original).
Court No. 02-00756 Page 12
imposing a duty on subject imports and thus enabling
the industry to compete against fairly traded imports.
The statutory scheme in fact contemplates that subject
imports may remain in the U.S. market after an order
is imposed and even that the industry afterwards may
continue to suffer material injury. Indeed, the
dumping of subject imports may have no impact on
respective market shares, but may affect the domestic
industry’s selling price and profitability alone.
Therefore, the Commission is required under Bratsk to
determine whether non-subject imports would fill the
void created by the “elimination” of subject imports
despite the fact that there may be no such void
created by an order.
Remand Results, pp. 28-29 (footnotes omitted). Nonetheless,
they report, in pertinent part, as follows:
During the period of investigation, from 1999 to
2001, steel wire rod was produced in 41 countries.
With respect to non-Trinidadian subject imports, the
record indicates that producers in the six countries
collectively had sufficient excess capacity in 2001
. . . to more than replace Trinidadian exports to the
United States of 355,089 short tons.
. . . The main non-subject sources of wire rod in the
U.S. market over the period of investigation are
Turkey, Japan, and Germany. Turkey’s production
capacity in 2000 . . . [was not fully utilized].
Japan was the world’s third largest non-Trinidadian
producer of wire rod in 2000, producing approximately
7.9 million short tons, of which 16 percent was
exported worldwide during 1999 and 2000 combined,
years for which data were available. Japanese exports
to the United States decreased by 15.0 percent during
the period of investigation, and appear to have been
concentrated in the higher-end wire rod products.
Germany was the world’s fourth-largest non-Trinidadian
Court No. 02-00756 Page 13
producer of wire rod in 2000, exporting very large
quantities of wire rod to many countries during the
period of investigation, with exports accounting for
43.4 percent of domestic production in 2000. Public
data show German production of about 6.8 million tons
in 2000, and the Commission’s data show excess
capacity . . . in 2001. China was the world’s largest
producer of wire rod in 2000, with production of 29
million short tons, although a relatively small
exporter of wire rod to the United States during the
POI. There is some evidence that China would have had
the ability to export additional wire rod products to
the United States during the period of investigation,
given planned increases in its domestic production
capacity during the period and the rapid trajectory of
its growth in wire rod exports to the United States
from 1999 to 2001. This is consistent with the
existence of unused non-subject capacity to supply the
U.S. market. . . .
Taken together, the record with respect to
production, unused production capacity, and export
orientation of the producers in the aggregate in the
non-Trinidadian countries provides ample evidence that
such producers could have, if so inclined, exported
sufficient volumes to the United States during the POI
to fully replace subject imports from Trinidad.
Absent any evidence that these producers would not
have acted in such a manner, we are unable to find
that imports from such producers would not have
replaced subject imports from Trinidad and Tobago in
the U.S. market, either by using unutilized capacity
or by diverting exports from other markets. . . .
Regarding the benefit to the domestic industry,
we note that we lack the type of pricing data for many
non-subject products that we would normally use to
analyze this factor, and are forced to rely partially
on average unit values as a consistent unit of
measurement. The situation with respect to pricing is
mixed. For the foreign sources for which we have
product-specific pricing data . . . the pricing data
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show numerous instances in which other imports
oversold imports from Trinidad and Tobago, but also
numerous instances in which other imports undersold
imports from Trinidad and Tobago. . . .
The underselling and low average unit values for
many non-Trinidadian imports, considered in light of
the apparent ability of numerous subject and non-
subject wire rod producers to divert additional wire
rod to the U.S. market, and the large number of
foreign producers producing the [type of] wire rod in
which Trinidadian shipments were concentrated, leaves
us unable to conclude that non-subject and non-
Trinidadian subject imports would not have replaced
imports from Trinidad and Tobago in the U.S. market
during the period of investigation, had Trinidad and
Tobago been excluded from the market. Given the low
prices or average unit values at which many of these
imports entered the United States, we cannot conclude
that non-subject and non-Trinidadian subject imports
would not have replaced imports from Trinidad and
Tobago and negated the benefit to the domestic
industry of the exclusion from the market of an AD
order on the subject imports.
Id. at 37-42 (footnotes omitted; emphasis in original).
III
In view of the foregoing, it cannot be said that the
defendant has not carried out the CAFC mandate to
make a specific causation determination and in that
connection . . . directly address whether [other LTFV
imports and/or fairly traded imports] would have
replaced [Trinidad and Tobago’s] imports without any
beneficial effect on domestic producers.
Nor can this court conclude that the agency record, such as it
still is, does not support the above-quoted specific causation
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determination. Ergo, defendant’s Remand Results should be
affirmed, with an amended judgment entered accordingly.
Decided: New York, New York
July 6, 2007
/s/ Thomas J. Aquilino, Jr.
Senior Judge
AMENDED JUDGMENT
UNITED STATES COURT OF INTERNATIONAL TRADE
Thomas J. Aquilino, Jr., Senior Judge
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MITTAL STEEL POINT LISAS LIMITED, :
Plaintiff, :
v. : Court No. 02-00756
UNITED STATES, :
Defendant. :
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This court having entered a judgment of dismissal of
this action pursuant to slip opinion 05-37, 29 CIT ___, 366
F.Supp.2d 1300 (2005); and the plaintiff having prosecuted an
appeal therefrom; and the U.S. Court of Appeals for the Federal
Circuit ("CAFC") having decided sub nom. Caribbean Ispat Ltd. v.
United States, 450 F.3d 1336 (2006), to vacate that judgment of
dismissal and remand this matter; and this court in slip opinion
06-151, 30 CIT ___ (Oct. 13, 2006), having read the mandate of
the CAFC to require remand to the U.S. International Trade
Commission (“ITC”) to
“make a specific causation determination and in that
connection . . . directly address whether [other LTFV
imports and/or fairly traded imports] would have
replaced [Trinidad and Tobago’s] imports without any
beneficial effect on domestic producers”,
quoting 450 F.3d at 1341, quoting from Bratsk Aluminum Smelter
Court No. 02-00756 Page 2
v. United States, 444 F.3d 1369, 1375 (Fed.Cir. 2006); and the
defendant having filed the Views of the Commission (Jan. 16,
2007) pursuant thereto; and this court, after due deliberation,
having rendered a decision thereon; Now therefore, in
conformity with said decision, it is
ORDERED, ADJUDGED and DECREED that the view of certain
members of the ITC that determines that an industry in
the United States is not materially injured or
threatened with material injury by reason of imports
of certain wire rod from Trinidad and Tobago that is
sold in the United States at less than fair value
be, and it hereby is, affirmed.
Dated: New York, New York
July 6, 2007
/s/ Thomas J. Aquilino, Jr.
Senior Judge