Elkem Metals Co. v. United States

Slip Op. 06-108

UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________
:
ELKEM METALS CO., APPLIED :
INDUSTRIAL MATERIALS CORP., AND :
CC METALS & ALLOYS, INC., : Before: Richard K. Eaton,
: Judge
:
Plaintiffs, :
: Consol. Court No. 99-00628
v. :
:
UNITED STATES, :
:
Defendant. :
___________________________________:

MEMORANDUM OPINION AND ORDER

[United States International Trade Commission’s Third Remand
Results remanded]

Dated: July 21, 2006

DLA Piper Rudnick Gray Cary US, LLP (William D. Kramer,
Martin Schaefermeier, and Clifford E. Stevens, Jr.), Eckert
Seamans Cherin & Mellott, LLC (Dale Hershey), and Howrey Simon
Arnold & White, LLP (John W. Nields, Jr. and Laura S. Shores),
for plaintiff Elkem Metals Co.

Williams Montgomery & John, Ltd. (Theodore J. Low), for
plaintiff Applied Industrial Materials Corp.

Arent Fox Kintner Plotkin & Kahn, PLLC (Eugene J. Meigher,
Matthew Kanna, and George R. Kucik), for plaintiff CC Metals &
Alloys, Inc.

Dangel & Mattchen, LLP (Edward T. Dangel, III), for
plaintiff-intervenor Globe Metallurgical, Inc.

Lyn M. Schlitt, General Counsel, United States International
Trade Commission, James M. Lyons, Deputy General Counsel, United
States International Trade Commission (Marc A. Bernstein), for
Consol. Court No. 99-00628 Page 2

defendant.

Kaye Scholer, LLP (Julie C. Mendoza), for defendant-
intervenor Ferroatlantica de Venezuela.

Hogan & Hartson, LLP (Mark S. McConnell), for defendant-
intervenor General Motors Corp.

Greenberg Traurig, LLP (Philippe M. Bruno), for defendant-
intervenors Associao Brasileira dos Productores de Ferroligas e
de Silico Metalico, Companhia Brasileira & Companhia Ferroligas,
Nova Era Silicon S/A, Italmagnesio S/A-Industria e Comercio, Rima
Industrial S/A, and Companhia Ferroligas Minas Gerais -
Minasligas.

Eaton, Judge: This matter is before the court following

remand to the United States International Trade Commission (“ITC”

or the “Commission”) of its negative injury determination

contained in Ferrosilicon from Brazil, China, Kazakhstan, Russia,

Ukraine, and Venezuela, Invs. Nos. 303-TA-23, 731-TA-566-570, and

731-TA-641 (Final) (Reconsideration) (Second Remand), USITC Pub.

3627 (Sept. 2003) (“Second Remand Determination”). See Elkem

Metals Co. v. United States, 28 CIT __, slip op. 04-49 (May 12,

2004) (not published in the Federal Supplement) (“Elkem VI”), as

modified by, Elkem Metals Co. v. United States, 28 CIT __, slip

op. 04-152 (Dec. 3, 2004) (not published in the Federal

Supplement) (“Elkem VII”). Pursuant to remand, the Commission

has again issued a determination in Ferrosilicon from Brazil,

China, Kazakhstan, Russia, Ukraine, and Venezuela, Invs. Nos.

303-TA-23, 731-TA-566-570, and 731-TA-641 (Final)
Consol. Court No. 99-00628 Page 3

(Reconsideration) (Third Remand), USITC Pub. 3765 (Mar. 2005)

(“Third Remand Determination”), and again found that the U.S.

ferrosilicon industry was not injured as a result of ferrosilicon

imports. Plaintiffs now challenge the results of the Third

Remand Determination. The court has jurisdiction pursuant to 28

U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(ii)

(2000). For the reasons set forth below, the court remands the

Third Remand Determination to the ITC for further consideration.

BACKGROUND

Familiarity with the facts of this dispute is presumed. For

purposes of this opinion, the following history is noted. In

Elkem VI, the court considered whether an established price-

fixing Conspiracy1 was a significant condition of competition

that had affected prices charged by U.S. ferrosilicon producers

during: (1) the period preceding the Conspiracy, i.e., the first

three quarters of 1989 (“Prior Period”); (2) the period of the

Conspiracy itself, i.e., the period from late-1989 through mid-

1991 (“Conspiracy Period”); and (3) the period subsequent to the

end of the Conspiracy, i.e., the period from mid-1991 to mid-1993

(“Subsequent Period”). See Elkem VI, 28 CIT at __, slip op. 04-

1
The Conspirators were plaintiffs Elkem Metals Co.,
American Alloys, Inc., and SKW Metals & Alloys, Inc., the
predecessor firm to CC Metals & Alloys, Inc. (collectively,
“Conspirators” or “plaintiffs”). See Elkem Metals Co. v. United
States, 27 CIT __, 276 F. Supp. 2d 1296, 1300 (2003) (“Elkem V”).
Consol. Court No. 99-00628 Page 4

49 at 3 n.1. There, the court “sustain[ed] the ITC’s finding

that the price-fixing [C]onspiracy did not affect prices during

the Prior Period”2 and remanded, as unsupported by substantial

evidence, the Commission’s finding that the price-fixing

Conspiracy affected prices during the Subsequent Period. Id. at

8.

In Elkem VII, the court addressed the ITC’s motion seeking

reconsideration of its holding in Elkem VI that substantial

evidence did not support the Commission’s finding that the price-

fixing Conspiracy affected prices during the Subsequent Period.

See Elkem VII, 28 CIT at __, slip op. 04-152 at 3. By its

motion, the ITC asserted that the court erred because “[s]everal

of the remand instructions . . . appear[ed] to require the

Commission to engage in inquiries that do not reflect the

requirements of the antidumping and countervailing duty laws.”

Mot. of Def. ITC for Reconsideration (“Def.’s Mot.”) at 5; see

2
The court sustained the finding that the price-fixing
Conspiracy was a significant condition of competition that
affected prices during the Conspiracy Period, see Elkem V, 27 CIT
at __, 276 F. Supp. 2d at 1313; and, following remand, that the
price-fixing Conspiracy was not a significant condition of
competition during the Prior Period, see Elkem VI, 28 CIT at __,
slip op. 04-49 at 8. Although the Conspiracy was not a
significant condition of competition during the Prior Period, the
ITC concluded that “[t]he available pricing data for the Prior
Period do not detract from [the negative injury determination],
because they show predominant overselling.” Second Remand
Determination at 17 (footnote omitted).
Consol. Court No. 99-00628 Page 5

also Elkem VII, 28 CIT at __, slip op. 04-152 at 3–4. The court

treated the Commission’s motion as one for modification and

clarification rather than reconsideration because, while the

ITC’s arguments did not establish that the court’s decision was

“manifestly erroneous,” they were meritorious in some respects.

See Elkem VII, 28 CIT at __, slip op. 04-152 at 3.

The ITC first objected to the remand instruction from Elkem

VI that required it to quantify its findings by determining the

“true” market price of ferrosilicon.3 See Elkem VI, 28 CIT at

__, slip op. 04-49 at 19. The need to instruct the ITC to

quantify its findings arose after the Commission introduced, in

the Second Remand Determination,4 the notion that prices in the

Subsequent Period exceeded the “true market price.” See Second

Remand Determination at 11. The ITC used the construct “true

3
This instruction provided that: “On remand, the ITC
shall (1) determine the true market price the ITC referenced in
its Second Remand Determination at 10 . . . .” Elkem VI, 28 CIT
at __, slip op. 04-49 at 19 (internal quotation marks omitted).
4
In the Second Remand Determination, the ITC stated
that:

By contrast, if the effects of the [C]onspiracy on
prices were limited solely to the Conspiracy Period,
one would expect an immediate decline from prices
established by a [C]onspiracy, which would be at
inflated levels relative to a “true” market price, to
prices established by marketplace considerations.

Second Remand Determination at 11.
Consol. Court No. 99-00628 Page 6

market price” to substantiate its conclusion that the

[C]onspiracy affected prices beyond the Conspiracy Period. Id.

According to the ITC, the antidumping and countervailing duty

laws did not require it to determine a “true market price.” See

Elkem VII, 28 CIT at __, slip op. 04-152 at 10. The court

acknowledged the possibility for the ITC to make findings based

on “true market price” that would be supported by substantial

evidence without quantifying the actual price itself, but

emphasized that, if the ITC wished to continue using the term

“true market price,” it had to define the term and provide

substantial evidence supporting any findings that were based on

its use. Id. at 13. As a result, the court modified the remand

instructions regarding “true market price” as follows:

Should it continue to rely on the term “true market
price,” the ITC shall (1) define the term “true market
price” it referenced in its Second Remand Determination
at 10, and provide substantial evidence supporting any
findings it makes regarding price changes that should
have occurred in the absence of continued effects from
the [C]onspiracy, including any findings based on the
use of the term “true market price,” but is not
required to provide a quantification of that term; (2)
account for the factors it relied upon so heavily in
its prior determinations, e.g., demand and U.S.
apparent consumption; (3) clearly explain how these
factors either support or do not support its finding
that the [C]onspiracy affected domestic prices in the
Subsequent Period; and (4) evaluate the relevant
economic factors it finds to exist in the marketplace
for the entire Subsequent Period, not merely the first
quarter of the Subsequent Period.

Id.
Consol. Court No. 99-00628 Page 7

The ITC further asserted that it should not be required on

remand to “state with specificity what difference in price it

would consider material in the context of this inquiry, and

why.”5 Elkem VI, 28 CIT at __, slip op. 04-49 at 26–27. Rather

than reconsidering its instruction, the court clarified that the

ITC could, if it so desired, comply with the instruction by

substituting the word “significant” for “material” because the

court’s instructions were designed to show what price

differential between the Conspiracy Period and Subsequent Period

would be significant enough to demonstrate that the Conspiracy

affected prices in the Subsequent Period. See Elkem VII, 28 CIT

at __, slip op. 04-152 at 15.

The Commission next contested the court’s instruction that,

“[s]hould the ITC hope to establish by substantial evidence that

the [C]onspiracy affected prices during the Subsequent Period, a

baseline [price] would be useful.” Elkem VI, 28 CIT at __, slip

op. 04-49 at 32. The court clarified that its suggestion to

5
This instruction resulted from the ITC’s finding that
there was “no significant shift in the [C]onspirators’ pricing
patterns with respect to other domestic producers in the period
following the Conspiracy Period,” and “prices charged by both the
[C]onspirators and the domestic industry as a whole during the
Subsequent Period were not the result of competitive marketplace
conditions.” Second Remand Determination at 11, 13.
Consol. Court No. 99-00628 Page 8

include a baseline price was merely “guidance from the court as

to the type of evidence that might be useful in order to satisfy

the demands of substantial evidence. . .,” and not a remand

instruction. Elkem VII, 28 CIT at __, slip op. 04-152 at 16.

Finally, the ITC asserted that the court’s instruction to

disaggregate the pricing data for each of the Conspirators is not

required by antidumping or countervailing duty laws. See Def.’s

Mot. at 7. The court found this contention to have some merit,

and therefore amended the remand instruction to read as follows:

(3) in revisiting its finding that the Conspirators
frequently maintained higher prices than their domestic
competitors during the Subsequent Period, [the ITC
should] consider the data for each of the Conspirators
and either (a) disaggregate the pricing data or (b)
explain why its method of aggregating the data is
reasonable considering the court’s discussion of that
data, and, in any event, identify sufficient record
evidence to support its finding, and explain how that
evidence supports its finding.

Elkem VII, 28 CIT at __, slip op. 04-152 at 17.

Following the issuance of the court’s order modifying the

remand instructions, the ITC issued its Third Remand

Determination. Rather than directly complying with the court’s

remand instructions, however, the ITC has instead redirected its

efforts toward disproving Elkem’s assertion that, “absent
Consol. Court No. 99-00628 Page 9

evidence to the contrary, the Commission should presume that

ferrosilicon prices during the Subsequent Period were established

pursuant to marketplace forces because ferrosilicon is a

commodity product sold by numerous suppliers pursuant to

competitive bidding.” Third Remand Determination at 9.

Specifically, the Commission states that:

[W]e have not attempted to make an affirmative showing
that the [C]onspiracy affected prices during the
Subsequent Period. To comply with the CIT’s decision,
our finding instead concentrates solely on what the
record does not show – namely, that prices during the
Subsequent Period were established in a different
manner, i.e., solely pursuant to marketplace forces,
than prices for the Conspiracy Period.

Third Remand Determination at 19 (emphasis in original). In so

doing, the ITC abandoned its finding in the Second Remand

Determination that, “a significant condition of competition was

that the price-fixing [C]onspiracy had effects on prices charged

by U.S. ferrosilicon producers during . . . the Subsequent

Period.” Second Remand Determination at 15.

Now before the court are the ITC’s conclusions contained in

the Third Remand Determination. Here, the Commission first

provides a “modified analysis of subject import volume, price

effects, and impact once it stated it was unable on third remand

to find that the [C]onspiracy affected prices during the
Consol. Court No. 99-00628 Page 10

Subsequent Period.” Defendant’s Rebuttal Comments on Third

Remand Determination (“Def.’s Comments”) at 11; see also Third

Remand Determination at 22. The ITC found that “the record

cannot support any conclusion on how prices were established

during that period, including a conclusion that prices were

solely the result of marketplace forces.” Third Remand

Determination at 22. This led the ITC to find, based on what the

record did not show, that the likely volume, price effects, and

impact of subject imports on the domestic industry were not

significant. Id. at 24–28.

With regard to the likely volume of subject imports, the ITC

found that the 1992 increase in volume that occurred during the

Subsequent Period was not significant because:

[W]hile we have not made a finding that the
[C]onspiracy affected prices charged by domestic
ferrosilicon producers during the Subsequent Period, we
have concluded, based on [Best Information Available
(“BIA”)], that the record indicates no significant
change in pricing patterns between the Conspiracy
Period and the Subsequent Period. In light of this,
the record cannot support a finding that the pricing
data in the record for the Subsequent Period reflect
prices determined exclusively pursuant to marketplace
conditions. We therefore cannot find the requisite
causal link between this increase in the subject
imports and the declines in the condition of the
domestic industry . . . .

Third Remand Determination at 23. The ITC further stated that:
Consol. Court No. 99-00628 Page 11

The lack of reliable information for the Conspiracy
Period, or for the full period of investigation that
the Commission would typically examine, impairs our
ability to assess the significance of changes, such as
those in subject import volume, between the Conspiracy
Period and the Subsequent Period.

Id.

In addition, the ITC concluded that the likely price effects

of subject imports were not significant:

Because there is no finding that the domestic industry
pricing data for the Subsequent Period reflect prices
at market levels, we cannot find this data – or any
other pricing data in the record – probative for an
analysis of underselling during the period. We
consequently lack a sufficient evidentiary basis to
conclude that any underselling is significant.

Id. at 25.

The ITC went on to hypothesize, see Third Remand

Determination at 25, that if the pricing data for the Prior

Period and the Subsequent Period did reflect competitive

marketplace conditions, the

usable underselling observations from the Prior Period
and the Subsequent Period would still account for a
minority of all price comparisons during the entire
period for which we have consistently-generated pricing
data. The significance of this relatively small
proportion of underselling is diminished further by the
fact that ferrosilicon is a commodity product, for
which we would ordinarily expect to see some degree of
underselling of the domestically-produced product by
products from other sources.
Consol. Court No. 99-00628 Page 12

Id. at 25–26.

As a result, the ITC found that the likely impact of subject

imports on the domestic industry was not significant:

Because the 1991 data are not a probative baseline for
competitive market conditions, and there is no reliable
information in the record concerning what the CIT has
acknowledged is a central condition of competition, the
record permits us to do no more than observe that
domestic industry performance declined concurrently
with increases in subject import volume. The record
does not permit us to ascertain whether there is a
causal link between the subject imports and the
industry declines. Absent such a causal link, we are
not authorized to make an affirmative determination of
material injury by reason of subject imports.

Id. at 27.

The ITC justified its analysis by contending that the court

“found in Elkem V that the Commission was entitled to use BIA and

take adverse inferences in this proceeding because . . . the

Conspirators . . . ‘significantly impeded’ its investigation

within the meaning of 19 U.S.C. § 1677e(c).” Id. at 7–8; see

also Elkem Metals Co. v. United States, 27 CIT __, 276 F. Supp.

2d 1296, 1305 (2003) (“Elkem V”). For the ITC, a “principal

justification for the BIA rule is to avoid rewarding the

uncooperative and recalcitrant party for its failure to supply

requested information.” Third Remand Determination at 10
Consol. Court No. 99-00628 Page 13

(internal quotation marks omitted). In addition, the ITC failed

to comply with the court’s instruction to provide an independent

evidentiary basis for any conclusion based on BIA because in its

view, “absent conducting a separate investigation to obtain the

missing data – something the BIA provision is intended to avoid –

the Commission will not typically have ready reference to factual

material that could provide independent evidentiary corroboration

for use of an adverse inference.” Id. at 21 n.72.

Plaintiffs now challenge the Third Remand Determination on

the grounds that the Commission failed to support its findings

with substantial evidence. See Comments of CC Metals and Alloys,

Inc. On The Third Remand Determinations of the ITC (“CCMA

Comments”) at 3; Elkem Comments on ITC Third Remand Determination

(“Elkem Comments”) at 9. Plaintiffs further assert that, because

the Commission conceded that the record lacks substantial

evidence indicating that subject imports had an adverse pricing

impact during the Subsequent Period, the “ITC shifted the grounds

of decision onto a purportedly ‘new’ theory. . .” of focusing on

an adverse inference, i.e., what the record does not show. CCMA

Comments at 9; see also Elkem Comments at 4. In other words,

plaintiffs posit that there is no evidentiary basis for the

Commission’s adverse inference that the Conspiracy, or some other
Consol. Court No. 99-00628 Page 14

force, prevented domestic prices from being set by the market in

the Subsequent Period.

STANDARD OF REVIEW

When reviewing the ITC’s final injury determination in an

antidumping or countervailing duty investigation, “[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). “Substantial evidence is ‘such

relevant evidence as a reasonable mind might accept as adequate

to support a conclusion.’” Huaiyin Foreign Trade Corp. (30) v.

United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting

Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)).

“Substantial evidence requires more than a mere scintilla, but is

satisfied by something less than the weight of the evidence.”

Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed. Cir. 2004)

(internal citation and quotation marks omitted). The existence

of substantial evidence is determined “by considering the record

as a whole, including evidence that supports as well as evidence

that ‘fairly detracts from the substantiality of the evidence.’”

Huaiyin, 322 F.3d at 1374 (quoting Atl. Sugar, Ltd. v. United

States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)).
Consol. Court No. 99-00628 Page 15

DISCUSSION

The court has held in previous opinions that the ITC’s “use

of BIA . . . is in accordance with law,” and that “[plaintiffs]

ha[ve] produced nothing to convince the court that the ITC’s

conclusions with respect to BIA should be limited to the

Conspiracy Period.” Elkem VI, 28 CIT at __, slip op. 04-49 at

13. Nevertheless, the court may “hold unlawful the [ITC’s] final

determination if it is unsupported by substantial evidence on the

record or otherwise not in accordance with law.” Delverde, SrL

v. United States, 202 F.3d 1360, 1363 (Fed. Cir. 2000).

Accordingly, the court has repeatedly held that “substantial

evidence [does] not support the ITC’s adverse inference that the

price-fixing [C]onspiracy affected prices outside the Conspiracy

Period.” Elkem VI, 28 CIT at __, slip op. 04-49 at 5; see also

Elkem VII, 28 CIT at __, slip op. 04-152 at 6. The court stated

in Elkem V that:

It does not appear that the ITC had a sound rationale
in making the adverse inference that the [C]onspiracy
affected prices during the entire Original [Period of
Investigation], and not just during the period in which
the [C]onspiracy was actually in effect. . . . While
the ITC may justifiably conclude that the “failure [to
reveal the [C]onspiracy] gives rise to an inference
that the evidence is unfavorable to” Plaintiffs, it may
not use the inference to reach a conclusion that
appears to be at odds with the known facts, and an
attempt to do so on the part of the ITC cannot be said
to be supported by substantial evidence on the record.
Consol. Court No. 99-00628 Page 16

Elkem V, 27 CIT at __, 276 F. Supp. 2d at 1315 (internal citation

omitted).

The ITC claims that in the Third Remand Determination, it

abandoned its previous conclusion that the Conspiracy affected

prices in the Subsequent Period. Even so, the ITC appears to be

attempting by way of an adverse inference to reach the same

conclusion. That is, if the prices in the Subsequent Period were

not set solely by the market, it follows that they must have been

affected by the Conspiracy or by some other unstated force. See

Third Remand Determination at 22 (finding that the “record cannot

support any conclusion on how prices were established during [the

Subsequent P]eriod, including a conclusion that prices were

solely the result of marketplace forces.”).

The court has held previously that the “ITC cannot, using

[an] adverse inference [], invent a price-fixing conspiracy

during the period outside the time period during which the

[C]conspiracy was and was not found to be in effect . . . .”

Elkem V, 27 CIT at __, 276 F. Supp. 2d at 1315. Each remand

since Elkem V has instructed the ITC to “set forth the

evidentiary basis for the adverse inference that the price-fixing

[C]onspiracy affected prices throughout the entire Original

[Period of Investigation].” Id., 276 F. Supp. 2d at 1315.
Consol. Court No. 99-00628 Page 17

Rather than following the court’s instruction, the ITC again uses

“the approach of comparing pricing patterns during the Conspiracy

Period with those during the Subsequent Period . . .,”6 to

support its conclusion that prices in the Subsequent Period were

not set solely by marketplace forces. Third Remand Determination

at 9. In doing so, the ITC found no “material changes7 in

pricing patterns between the Conspiracy Period and the Subsequent

Period that could be attributed to the [C]onspirators changing

the manner in which they established prices.” Third Remand

Determination at 20. This finding, together with the court’s

finding that prices during the Conspiracy Period were distorted

by the Conspiracy, led the ITC to conclude that there is no

evidence that the prices in the Subsequent Period were not

similarly distorted, either by the Conspiracy or some other

6
The ITC found that “compar[ing] the prices that
domestic ferrosilicon producers charged during the latter portion
of the Conspiracy Period with the [sic] those charged during the
Subsequent Period . . . enable[d it] to examine whether prices
for the Subsequent Period solely reflected market forces and
represent the prices the producers would have charged during the
Subsequent Period . . . .” Second Remand Determination at 10.
7
The ITC’s analysis revealed that the “frequency of
underselling by the subject imports was 80 percent . . . for the
entire Conspiracy Period and 74 percent during the entire
Subsequent Period . . . .” Third Remand Determination at 15.
The ITC did not view this six percentage point differential as
being significant, particularly because the “difference in
underselling frequency between the Conspiracy Period and
Subsequent Period is far less than the difference in underselling
frequency between either of these periods and the Prior Period.”
Id.
Consol. Court No. 99-00628 Page 18

factor. Id.

The first difficulty with this theory is that the ITC’s

finding of a price distortion during the Conspiracy Period was

based on an adverse inference. See Elkem VI, 28 CIT at __, slip

op. 04-49 at 7. In Elkem VI, the court found that substantial

evidence supported the ITC’s adverse inference that the

Conspiracy distorted prices during the Conspiracy Period. Id.

This distortion, however, was never quantified, as the ITC only

“compared the prices of imported ferrosilicon and observed that

during the Conspiracy Period, imports of ferrosilicon undersold

the domestic product more frequently than in the months preceding

. . . the [C]onspiracy.” Elkem V, 27 CIT at __, 276 F. Supp. 3d

at 1311. Based on this comparison, the “court [found] that the

evidence . . . fairly support[ed] [the ITC’s] conclusions with

respect to the effect of the [C]onspiracy during the Conspiracy

Period.” Id. This comparison could be made because prices

during the Prior Period reflected market conditions, as “there is

no evidence that the [C]onspiracy affected prices prior to its

existence.” Elkem VI, 28 CIT at __, slip op. 04-49 at 15.

Thus, the extent to which prices were affected by the

Conspiracy during the Conspiracy Period is unknown. Indeed,
Consol. Court No. 99-00628 Page 19

plaintiffs have maintained throughout these proceedings that the

Conspiracy had no effect on prices. See Elkem VII, 28 CIT at __,

slip op. 04-152 at 8; see also CCM Compl. ¶ 56 (Oct. 28, 1999).

That being the case, a comparison of prices between the

Conspiracy Period and the Subsequent Period demonstrates nothing

with respect to how prices were set. As counsel for the ITC

noted at oral argument prior to the modification of the remand

instructions from Elkem VI, there would be a decline in prices

following the end of the Conspiracy Period because, “other things

being equal,” the prices would be solely determined by

marketplace forces. Elkem VII, 28 CIT at __, slip op. 04-152 at

11. That is a valid point, but the ITC has failed to determine

if marketplace conditions did remain equal, or changed in some

material respect following the Conspiracy Period. In other

words, without knowing either the extent of the distortion during

the Conspiracy Period or what the market would have determined

prices to be during the Subsequent Period, no valid comparison

can be made.

This approach is further flawed in that the ITC “lack[s]

reliable information for the Conspiracy Period, or for the full

period of investigation . . . [which] impairs [its] ability to

assess the significance of changes, such as those in subject
Consol. Court No. 99-00628 Page 20

import volume, between the Conspiracy Period and the Subsequent

Period.” Third Remand Determination at 23. If the ITC does not

know how prices were set in the Conspiracy Period, or how much

effect the price-fixing Conspiracy actually had on the prices

during the Conspiracy Period, the ITC simply cannot use prices

during the Conspiracy Period as a basis of comparison with the

Subsequent Period to make a determination. Furthermore, if the

ITC does not know what the market conditions were in the

Subsequent Period, the ITC cannot know if the prices were indeed

set by forces other than the market.

The Commission asserts that compelling it to ignore

plaintiffs’ misconduct and render a determination in plaintiffs’

favor “would subvert a principal justification of the BIA rule,

which is to avoid rewarding the uncooperative and recalcitrant

party for its failure to supply requested information.” Def.’s

Comments at 15 (internal quotation marks omitted). Nonetheless,

the ITC would substitute a lack of evidence for substantial

evidence. It is worth noting that the ITC has cited no case

where it has felt itself bound, or required any party to

affirmatively demonstrate that prices were set by the market.

The court’s analysis is “not whether we agree with [the ITC’s]

conclusions, nor whether we would have come to the same

conclusions reviewing the evidence in the first instance, but
Consol. Court No. 99-00628 Page 21

only whether [the ITC’s] determinations were reasonable.” See AK

Steel Corp. v. United States, 192 F.3d 1367, 1371 (Fed. Cir.

1999) (citing U.S. Steel Group v. United States, 96 F.3d 1352,

1357 (Fed. Cir. 1996)). Here, it is not reasonable for the court

to affirm a determination by the ITC when there is no data

tending to confirm a central part of its analysis. See Allegheny

Ludlum Corp. v. United States, 287 F.3d 1365, 1374 (Fed. Cir.

2002) (finding that Commission’s price determination was not

supported by substantial evidence due to inaccurate data).

Indeed, “[n]otwithstanding the tolerance of the substantial

evidence requirement for Commission determinations which contain

some errors, . . . the statutory language of 19 U.S.C. §

1677(7)(B) . . . [does not] permit[] the court to affirm a

[determination] which is legally flawed as to each of the three

factors the Commission is obliged to consider. . . .” Id. at

1376 (emphasis omitted).

Although the ITC is “not required to amass every conceivable

shred of relevant data in order to comply with the requirements

of the law, the absence of information necessary for a thorough

analysis may render a determination unsupported by substantial

evidence.” Chung Ling Co., Ltd. v. United States, 16 CIT 636,

640, 805 F. Supp. 45, 49 (1992) (internal citations and quotation
Consol. Court No. 99-00628 Page 22

marks omitted). The court, therefore, cannot agree with the

ITC’s conclusion that, based on the lack of available

information, the prices in the Subsequent Period were not solely

determined by marketplace forces. The argument in the Third

Remand Determination suffers from the same infirmity as the

previous arguments. Phrasing the conclusion differently does not

alter the result.

CONCLUSION

Based on the foregoing, the court remands the ITC’s

conclusion that domestic prices in the Subsequent Period were not

established solely by the marketplace. On remand, the ITC shall

either (1) reopen the record to obtain relevant data of

marketplace conditions to support, with substantial evidence, its

conclusion that prices in the Subsequent Period were not set by

market forces, or (2) find that the price-fixing Conspiracy was

not a significant factor in the Subsequent Period and further

find that the prices in the Subsequent Period were set by market

forces and complete its analysis accordingly.

Remand results are due on October 19, 2006, comments are due

on November 18, 2006, and replies to such comments are due on

November 29, 2006. Neither comments nor replies to such comments
Consol. Court No. 99-00628 Page 23

shall exceed thirty pages in length.

/s/Richard K. Eaton
Richard K. Eaton

Dated: July 21, 2006
New York, New York