Save Domestic Oil, Inc. v. United States

Slip Op. 00 - 120

UNITED STATES COURT OF INTERNATIONAL TRADE

- - - - - - - - - - - - - - - - - - -x
SAVE DOMESTIC OIL, INC.,
:
Plaintiff,
:
v.
:

UNITED STATES, : Court No. 99-09-00558

Defendant, :
-and-
:
API AD HOC FREE TRADE COMMITTEE et
alia, :

Intervenor-Defendants.:

- - - - - - - - - - - - - - - - - - -x

Opinion & Order
[Plaintiff's motion for judgment on the
agency record granted; remanded to the
International Trade Administration.]

Decided: September 19, 2000

Wiley, Rein & Fielding (Charles Owen Verrill, Jr. and Tim-
othy C. Brightbill) for the plaintiff.

David W. Ogden, Assistant Attorney General; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice (A. David Lafer and Lucius B. Lau); and
Office of Chief Counsel for Import Administration, U.S. Depart-
ment of Commerce (Robert J. Heilferty), of counsel, for the
defendant.

Dewey Ballantine LLP (Harry L. Clark, Michael H. Stein, Brad-
ford L. Ward and John W. Bohn) for intervenor-defendant API Ad
Hoc Free Trade Committee.

White & Case (Carolyn B. Lamm, Adams C. Lee and David L. El-
mont) for intervenor-defendant Saudi Arabian Oil Company.

Shearman & Sterling (Thomas B. Wilner, Jeffrey M. Winton and
Jeronimo Gomez del Campo) for intervenor-defendants Petroleos de
Venezuela, S.A. and CITGO Petroleum Corporation.
Court No. 99-09-00558 Page 2

O'Melveny & Myers LLP (Gary N. Horlick and Michael A. Meyer)
for intervenor-defendants Petróleos Mexicanos, P.M.I. Comercio
Internacional S.A. de C.V., and PEMEX Exploración y Producción.

King & Spalding (Joseph W. Dorn and Duane W. Layton) for
intervenor-defendant Texaco Inc.

Barnes, Richardson & Colburn (Robert E. Burke, Brian F.
Walsh and Robert F. Seely) for intervenor-defendant BP Amoco.

AQUILINO, Judge: This case arises from the filing a

year ago with the International Trade Administration, U.S. De-
partment of Commerce ("ITA") and the U.S. International Trade

Commission ("ITC") of a nine-volume Petition for the Imposition

of Antidumping and Countervailing Duties on certain crude petro-

leum oil products from Iraq, México, Saudi Arabia and Venezuela.
The petitioner was stated to be an incorporated consortium of

independent domestic crude petroleum oil producers, Save Domes-

tic Oil, Inc. ("SDO"), the individual members of which were

named Apache Corporation (Houston, Tex.), Arrow Oil & Gas, Inc.

(Norman, Okla.), BOGO Energy Corp. (Oklahoma City, Okla.), Con-

tinental Resources, Inc. (Enid, Okla.), Crescent Exploration
(Oklahoma City), Farrar Oil Company (Mt. Vernon, Ill.), Hough-

ton Oil & Gas, Inc. (Midland, Tex.), Keener Oil & Gas Company

(Tulsa, Okla.), Phoenix Production Co. (Cody, Wyo.), Pickrell

Drilling Co., Inc. (Great Bend, Kan.), Royal Drilling & Produc-

ing, Inc. (Crossville, Ill.), and Tilley Oil & Gas, Inc. (Enid).

The petition requested that the ITA and ITC

undertake a "regional industry" analysis in determining
industry support, market penetration and injury to the
domestic crude petroleum oil industry caused by subject
Court No. 99-09-00558 Page 3

imports[,] . . . defin[ing] th[e] regional market to
include, generally, the District of Columbia and the
43 contiguous States (and the U.S. Outer Continental
Shelf in the Gulf of Mexico), exclusive of Washington,
Oregon, California, Arizona, and Nevada. 1

Some 40 days later, while finding the petitioner to be an "inter-

ested party" within the meaning of 19 U.S.C. §1677(9) and that

it had made "an adequate regional-industry claim for initiation

purposes", the ITA did not accept the petition on the ground that
it "did not have the required industry support". Dismissal of

Antidumping and Countervailing Duty Petitions: Certain Crude Pe-

troleum Oil Products From Iraq, Mexico, Saudi Arabia, and Vene-

zuela, 64 Fed.Reg. 44,480 (Aug. 16, 1999). Whereupon this case

commenced, seeking judicial review and reversal of this determi-

nation.

I

Public information of the Department of Commerce 2 shows

over one thousand one hundred petitions to have been filed with
the ITA since enactment of the Trade Agreements Act of 1979, yet

apparently only one was subjected to the kind of threshold agency

1
ITA Record Document ("R.Doc") 1, vol. I, p. 2. This re-
gion was also described in terms of U.S. "Petroleum Administra-
tion for Defense Districts" or "PADD"s I to IV. See id at 3.
See also id. at 4 ("The Region Is A Market Separate From The Rest
Of The United States").
2
U.S. Import Administration, Antidumping Investigations
Case Activity (January 1, 1980 - December 31, 1999) , at ; Countervailing Duty Case Ac-
tivity (January 1, 1980 - December 31, 1999) , at .
Court No. 99-09-00558 Page 4

rejection at issue herein. See Carbon Steel Plate From Belgium
and the Federal Republic of Germany; Rescission of Notice Announc-
ing Initiation of Antidumping Investigations and Dismissal of

Petition, 49 Fed.Reg. 3,503 (Jan. 27, 1984) (producers of well

over 95 percent of subject merchandise opposed single-producer

petition). In fact, only 17 other petitions are reported as

having been summarily dismissed by the ITA over the last 20
years. Ten of them were found not to allege a basis upon which

antidumping or countervailing duties could be imposed. 3 Another

three petitions were dismissed because there had been no or de

minimis imports of the subject merchandise in the years immedi-

3
See Pure and Alloy Magnesium From Norway: Final Negative
Determination; Rescission of Investigation and Partial Dismissal
of Petition, 57 Fed.Reg. 30,942 (July 13, 1992); Pure and Alloy
Magnesium From Canada: Final Affirmative Determination; Rescis-
sion of Investigation and Partial Dismissal of Petition , 57 Fed.-
Reg. 30,939 (July 13, 1992); Rescission of Initiation of Coun-
tervailing Duty Investigation and Dismissal of Petition: Chrome-
Plated Lug Nuts and Wheel Locks From the People's Republic of
China ("PRC"); 57 Fed. Reg. 10,459 (March 26, 1992); Dismissal
of Countervailing Duty Petition and Termination of Proceeding:
Pure and Alloy Magnesium From Norway , 56 Fed.Reg. 49,748 (Oct. 1,
1991); Partial Rescission of Initiation of Antidumping Investiga-
tions and Dismissal of Petitions; Antifriction Bearings (Other
Than Tapered Roller Bearings) and Parts Thereof From Romania,
Singapore, and Thailand, 53 Fed.Reg. 39,327 (Oct. 6, 1988); Po-
tassium Chloride From the Soviet Union; Rescission of Initiation
of Countervailing Duty Investigation and Dismissal of Petition ,
49 Fed.Reg. 23,428 (June 6, 1984); Potassium Chloride From the
German Democratic Republic; Rescission of Initiation of Coun-
tervailing Duty Investigation and Dismissal of Petition , 49
Fed.Reg. 23,428 (June 6, 1984); Fresh Cut Roses From Colombia;
Dismissal of Antidumping Petition , 46 Fed.Reg. 33,575 (June 30,
1981); Toy Balloons and Playballs From Mexico; Dismissal of Coun-
tervailing Duty Petition, 46 Fed.Reg. 31,698 (June 17, 1981);
Glass-Lined Steel Storage Tanks, Pressure Vessels and Parts
Thereof From France; Dismissal of Countervailing Duty Petition ,
45 Fed.Reg. 67,404 (Oct. 10, 1980).
Court No. 99-09-00558 Page 5

ately preceding their respective filings. 4 And four were found

not to have been presented by an interested party. 5

A

Be then all those other, apparently facially-accepta-

ble petitions as they were, from the beginning the Trade Agree-

ments Act has contemplated ITA dismissal of petitions deemed not

in compliance with the threshold standards set by Congress. As
amended by the Uruguay Round Agreements Act ("URAA"), Pub. L. No.

103-465, 108 Stat. 4809 (Dec. 8, 1994), (and by the Miscellaneous
Trade and Technical Corrections Act of 1996, Pub. L. No. 104-295,

110 Stat. 3514 (Oct. 11, 1996)), the statute governing procedures

for initiating herein an antidumping-duty investigation provided,

in part, as follows:

4
See Initiation of Antidumping Investigation/Dismissal of
Antidumping Petitions Certain Steel Products From Romania , 47
Fed.Reg. 5,752 (Feb. 8, 1982); Initiation of Countervailing Duty
Investigations/Dismissal of Countervailing Duty Petition Certain
Steel Products From Luxembourg , 47 Fed.Reg. 5,750 (Feb. 8, 1982);
Initiation of Countervailing Duty Investigations/Dismissal of
Countervailing Duty Petitions; Certain Steel Products From the
Netherlands, 47 Fed.Reg. 5,743 (Feb. 8, 1982).
5
See Rescission of Initiation of Antidumping Duty Investi-
gation and Dismissal of Petition: Certain Portable Electric Type-
writers From Singapore, 56 Fed.Reg. 49,880 (Oct. 2, 1991); High
Information Content Flat Panel Displays and Display Glass There-
for From Japan: Final Determination; Rescission of Investigation
and Partial Dismissal of Petition , 56 Fed.Reg. 32,376 (July 16,
1991); Hot-Rolled Carbon Steel Sheet From Belgium and the Federal
Republic of Germany; Rescission of Notice Announcing Initiation
of Antidumping Investigations and Dismissal of Petition , 48 Fed.-
Reg. 52,757 (Nov. 22, 1983); Latchet Hook Kits From the United
Kingdom; Dismissal of Antidumping Petition , 45 Fed.Reg. 81,241
(Dec. 10, 1980).
Court No. 99-09-00558 Page 6

(b) Initiation by petition

(1) Petition requirements

An antidumping proceeding shall be ini-
tiated whenever an interested party described
in subparagraph (C),(D),(E),(F), or (G) of
section 1677(9) of this title files a peti-
tion with the [ITA], on behalf of an indus-
try, which alleges the elements necessary for
the imposition of the duty imposed by section
1673 of this title, and which is accompanied
by information reasonably available to the
petitioner supporting those allegations. The
petition may be amended at such time, and
upon such conditions, as the [ITA] and the
[ITC] may permit.

* * *

(3) Action with respect to petitions

(A) Notification of governments
Upon receipt of a petition filed under
paragraph (1), the [ITA] shall notify the
government of any exporting country named
in the petition by delivering a public ver-
sion of the petition to an appropriate rep-
resentative of such country.

(B) Acceptance of communications

The [ITA] shall not accept any unsolic-
ited oral or written communication from any
person other than an interested party de-
scribed in section 1677(9)(C),(D),(E),(F),
or (G) of this title before the [ITA] makes
its decision whether to initiate an inves-
tigation, except as provided in subsection
(c)(4)(D) of this section, and except for
inquiries regarding the status of the [ITA]'s
consideration of the petition.

* * *
Court No. 99-09-00558 Page 7

(c) Petition determination

(1) In general

(A) Time for initial determination

Except as provided in subparagraph (B),
within 20 days after the date on which a pe-
tition is filed under subsection (b) of this
section, the [ITA] shall --

(i) after examining, on the basis of
sources readily available to the [ITA], the
accuracy and adequacy of the evidence pro-
vided in the petition, determine whether the
petition alleges the elements necessary for
the imposition of a duty under section 1673
of this title and contains information rea-
sonably available to the petitioner support-
ing the allegations, and
(ii) determine if the petition has been
filed by or on behalf of the industry.

(B) Extension of time

In any case in which the [ITA] is re-
quired to poll or otherwise determine support
for the petition by the industry under para-
graph (4)(D), the [ITA] may, in exceptional
circumstances, apply subparagraph (A) by sub-
stituting "a maximum of 40 days" for "20 days".
* * *

(2) Affirmative determinations

If the determinations under clauses (i)
and (ii) of paragraph (1)(A) are affirmative,
the [ITA] shall initiate an investigation to
determine whether the subject merchandise is
being, or is likely to be, sold in the United
States at less than its fair value.

(3) Negative determinations

If the determination under clause (i) or
(ii) of paragraph (1)(A) is negative, the
[ITA] shall dismiss the petition, terminate
the proceeding, and notify the petitioner in
writing of the reasons for the determination.
Court No. 99-09-00558 Page 8

(4) Determination of industry support

(A) General rule

For purposes of this subsection, the
[ITA] shall determine that the petition has
been filed by or on behalf of the industry,
if --

(i) the domestic producers or work-
ers who support the petition account for
at least 25 percent of the total produc-
tion of the domestic like product, and

(ii) the domestic producers or work-
ers who support the petition account for
more than 50 percent of the production
of the domestic like product produced by
that portion of the industry expressing
support for or opposition to the petition.
(B) Certain positions disregarded

(i) Producers related to foreign producers

In determining industry support
under subparagraph (A), the [ITA] shall
disregard the position of domestic pro-
ducers who oppose the petition[] if such
producers are related to foreign produc-
ers, as defined in section 1677(4)(B)(ii)
of this title, unless such domestic pro-
ducers demonstrate that their interests
as domestic producers would be adversely
affected by the imposition of an antidump-
ing duty order.

(ii) Producers who are importers

The [ITA] may disregard the posi-
tion of domestic producers of a domestic
like product who are importers of the
subject merchandise.

(C) Special rule for regional industries

If the petition alleges the industry is a
regional industry, the [ITA] shall determine
whether the petition has been filed by or on
behalf of the industry by applying subparagraph
(A) on the basis of production in the region.
Court No. 99-09-00558 Page 9

(D) Polling the industry

If the petition does not establish support
of domestic producers or workers accounting for
more than 50 percent of the total production of
the domestic like product, the [ITA] shall --
(i) poll the industry or rely on other
information in order to determine if there
is support for the petition as required by
subparagraph (A), or

(ii) if there is a large number of
producers in the industry, the [ITA] may
determine industry support for the peti-
tion by using any statistically valid
sampling method to poll the industry.
(E) Comments by interested parties

Before the [ITA] makes a determination with
respect to initiating an investigation, any per-
son who would qualify as an interested party un-
der section 1677(9) of this title if an investi-
gation were initiated, may submit comments or in-
formation on the issue of industry support. After
the [ITA] makes a determination with respect to
initiating an investigation, the determination
regarding industry support shall not be reconsid-
ered.
(5) Definition of domestic producers or workers

For purposes of this subsection, the term "do-
mestic producers or workers" means those interested
parties who are eligible to file a petition under
subsection (b)(1) of this section.

19 U.S.C. §1673a. Similar procedure exists for initiating a coun-

tervailing-duty investigation. 6

6
See 19 U.S.C. §1671a. Of the elements of section 1673a
set forth in haec verba in this opinion, a textual difference
in section 1671a is its notification-of-governments subsection,
to wit:

(footnote continued)
Court No. 99-09-00558 Page 10

As indicated above, the ITA, reacting within the
strict timeframe adopted by Congress, found the petitioner SDO
to be an interested party within the meaning of the statute, and
it upheld "for initiation purposes" 7 the claimed existence of a
regional industry. However, the Department of Commerce also
reported that, pursuant to the foregoing statutory authority, it
invited representatives of the governments of México, Saudi Ara-
bia and Venezuela for consultations with respect to the counter-
vailing-duty petitions 8; it determined that refined products are

Upon receipt of a petition filed under paragraph (1),
the [ITA] shall –

(i) notify the government of any exporting
country named in the petition by delivering a
public version of the petition to an appropri-
ate representative of such country; and
(ii) provide the government of any export-
ing country named in the petition that is a Sub-
sidies Agreement country an opportunity for con-
sultations with respect to the petition.

19 U.S.C. §1671a(b)(4)(A).
7
64 Fed.Reg. at 44,481, col. 1.
8
See id. at 44,480. If those invitation(s) issued pursuant
to 19 U.S.C. §1671a(b)(4)(A)(ii), supra, it should be noted that
Saudi Arabia (in contrast to the two other invitees) is not a
"Subsidies Agreement country" within the meaning of that section,
although it is the putative leader of the world cartel, the Or-
ganization of Petroleum Exporting Countries ("OPEC"), the ráison
d'être of which is to control production and fix prices of crude
oil. México, while not a formal member of OPEC, apparently at-
tempts to follow its lead. See, e.g., Ibrahim, Oil Countries
Approve World Cutback of 3% , N.Y. Times, March 24, 1999, p. C1;
Preston, Mexico Playing Unfamiliar Role in World Oil Politics ,
N.Y. Times, March 24, 1998, p. D2. Venezuela is a member of
OPEC, as are Iraq and several other countries considered either
unfriendly to or genuine enemies of the United States.
(footnote continued)
Court No. 99-09-00558 Page 11
not within the domestic like product for purposes of determining
industry support for the petition 9; it exercised its statutory
discretion to extend the deadline for determining whether to

Be the lack of direct diplomatic relations with Iraq (and
other hostile, oil-producing lands) as it is, nothing in the lan-
guage of 19 U.S.C. §§ 1671a(b)(4)(A)(i) and 1673a(b)(3), supra,
exempts the ITA from at least attempting to notify Baghdad of
SDO's petition, via the embassy of Poland, which ostensibly rep-
resented U.S. interests there [ see, e.g., U.S. Dep't of State,
Iraq - Travel Warning (Sept. 10, 1999)], or otherwise. Cf. 19
C.F.R. §351.202(i) (1999) (ITA "will invite the government of
any exporting country named in the petition for consultations").
Indeed, notwithstanding Resolution 661, which was adopted by
the Security Council of the United Nations on August 6, 1990
"to bring the invasion and occupation of Kuwait by Iraq to an
end and to restore the sovereignty, independence and territori-
al integrity of Kuwait" and which, among other things, decreed
that member states prevent the import of all commodities and
products originating in Iraq, and also Executive Order No. 12,-
724 of the U.S. President sub nom. Blocking Iraqi Government
Property and Prohibiting Transactions With Iraq , 55 Fed.Reg.
33,089 (Aug. 13, 1990), a report of the U.S. government itself
discloses that 146,722,000 barrels of crude oil were imported
from Iraq into this country during the period January - July
1999. See U.S. Energy Info. Admin., Petroleum Supply Monthly,
p. 82 (Sept. 1999). By way of comparison, the Table 40 on that
page shows imports from México, Saudi Arabia and Venezuela dur-
ing that period to have been 272.540, 299.957 and 252.837 mil-
lion barrels, respectively.
Whether the imports from Iraq were under the guise of the
so-called "oil-for-food" program viz. Resolution 986 of the U.N.
Security Council (April 14, 1995) and subsequent resolutions or
not, the court has reviewed SDO's 235-page volume II of its pe-
tition, relating to alleged dumping in America of those millions
of barrels of Iraqi oil, and also its 100-page volume VI, relat-
ing to claimed benefits bestowed upon such shipments by the gov-
ernment of Saddam Hussein. And the court must affirm that those
averments, on their face, are not clearly frivolous.
9
See 64 Fed.Reg. at 44,481. The ITA also concluded that it
did not need to decide definitively whether "lease condensates"
are included within the domestic like product. See id.
Court No. 99-09-00558 Page 12
initiate investigations "[b]ecause there was a question as to
whether the petitioner met the statutory requirements concerning
industry support" 10; it sought to survey each of the 410 largest
producers in the region, which accounted for over 86 percent of
regional production, and a 401-company sample of the remaining
producers there 11; it received letters of opposition from a num-
ber of companies which accounted for approximately 50 percent of
total regional production 12; and it considered whether or not to
disregard them, focusing on the opposing companies' attempt(s)
to demonstrate that their interests as domestic producers would
be affected adversely by the imposition of an antidumping or
countervailing-duty order 13. As for that focus, the ITA reports
specific resort to the API Ad Hoc Free Trade Committee

10
64 Fed.Reg. at 44,481, col. 3.
11
See id. at 44,481-82.
12
See id. at 44,482. Notwithstanding the Department's man-
date per 19 C.F.R. §351.303(b) (1999) that "all documents" in a
matter such as this be addressed and submitted to the Secretary
of Commerce, the court notes in passing that the chairman and
chief executive officer of at least one major oil company ex-
pressed "strong opposition" directly to the President of the
United States, with copies of that written displeasure apparent-
ly also transmitted directly to the Vice President and the Sec-
retaries of State, Treasury, and Energy, as well as Commerce,
and to an Assistant to the President, a Deputy Secretary of the
Treasury, an Acting Under Secretary of State, and an Assistant
Secretary of Commerce. See R.Doc 196.
13
64 Fed.Reg. at 44,482.
Court No. 99-09-00558 Page 13

because it is composed of the largest U.S. producers
in opposition to the petitions and because its treat-
ment is dispositive of the industry support issue. 14
According to the agency's determination, the Committee argued

that its opposition is not based on foreign inter-
ests or imports, but rather . . . on the fact that
the Committee members' interests as domestic produc-
ers would be adversely affected by the imposition of
antidumping or countervailing duties. [It] also arg-
ues that the petitioner has not alleged that each U.S.
producer about which allegations were made is related
to a foreign producer in each of the subject countries.
Moreover, the petitioner has provided no basis for as-
suming that a relationship in one country would cause
a producer to oppose a case against another country
with potentially competing suppliers.
Even assuming there are relationships, the Com-
mittee argues, because the interest of domestic pro-
ducers opposing the petition would be adversely af-
fected by the imposition of an order, the Department
must consider their views. . . . Finally, with re-
spect to imports, the Committee argues that importing
is a standard practice in the U.S. oil industry and
that the large producers account for only a small
portion of total imports. Moreover, . . . domestic
producers which oppose the petition are not bound to
imports from the subject countries. Therefore, the
Committee argues, the Department should not disregard
its opposition.

14
Id., col. 2. Those 16 firms, in alphabetical order, were
listed as ARCO, BHP Petroleum, BP Amoco, Burlington Resources,
Chevron Corporation, Conoco Inc., Exxon Corporation, Fina, Inc.,
Kerr-McGee Corporation, Marathon Oil Corporation, Mobil Corpora-
tion, Murphy Oil Corporation, Occidental Petroleum Corporation,
Phillips Petroleum Company, Shell Oil Company, and Texaco Inc.,
which list included their crude-oil production figures (in thou-
sands of barrels) for PADDs I-IV for 1997. See R.Doc 205.
Not only has the Ad Hoc Committee, itself, representing
these firms, been granted leave to intervene in this case as
a party defendant, BP Amoco, Chevron, Exxon, Mobil, Shell and
Texaco have all intervened on their own accounts. Moreover,
the court notes in passing that since then the Exxon and Mobil
corporations have formally merged, as has BP Amoco PLC (itself
a recent union of two erstwhile major oil companies) with ARCO,
formerly known as Atlantic Richfield Company.
Court No. 99-09-00558 Page 14
64 Fed.Reg. at 44,482, col. 2. The ITA accepted these composite
arguments in rendering its decision that the petitioner SDO did

not have support from more than 50 percent of the production in

the region of the domestic like product produced by that portion

of the industry expressing support for, or opposition to, the

petition. 15

B

Plaintiff's complaint pleads nine causes of action

herein, which in essence allege (1) the ITA did not include in

its calculation the production of a substantial number of domes-

tic producers which support the petition; (2) the agency attrib-

uted significant production by SDO-member Apache Corporation to

ARCO rather than in support of the petition; (3) the ITA made

no finding and did not recognize the views of the Paper, Allied-

Industrial, Chemical & Energy Workers International Union, AFL-

CIO, CLC in support of the petition on behalf of production-

related workers employed by a number of domestic oil producing

firms; (4) the agency failed to neutralize the opposition of

companies, the workers of which were in support of the petition;

(5) the ITA relied on the general arguments of the API Ad Hoc

Free Trade Committee, which was contrary to the statutory re-

quirement that individual domestic producers in opposition to

the petition prove that their particular interests would be

15
64 Fed.Reg. at 44,482. The agency eschewed addressing
"a number of complex issues regarding the 25-percent test . . .
because the 50-percent test has not been met." Id., col. 3.
Court No. 99-09-00558 Page 15

adversely affected by the imposition of antidumping or counter-

vailing duties; (6) the agency should have disregarded the op-

position of those domestic producers which import crude petro-

leum oil from one or more of the countries singled out in the

petition; (7) the ITA did not allow associations to express

support for SDO members unless those associations qualified

themselves as interested parties; (8) in polling the domestic

industry, the agency failed to include the support of the Inde-
pendent Petroleum Association of America and its membership to

the extent those members had not otherwise communicated their

views; and (9) U.S. Secretary of Energy Richardson stated pub-

licly that the government opposed the petition and that he would
attempt to influence the process established by the Trade Agree-

ments Act, supra.

The plaintiff has now interposed a motion for judgment

upon the agency record pursuant to CIT Rule 56.2, and which is
based upon the foregoing averments, save the claim of undue in-

fluence by the Secretary and/or the Department of Energy. 16 At

a hearing held in open court on August 14, 2000, which was based

16
In filing its motion for judgment in March 2000, the
plaintiff claimed that,

[m]ore than six months ago, [it] properly submitted
a FOIA request to the Department of Energy regarding
the Secretary's involvement in the Commerce proceed-
ing. This request has not been acted on, in contra-
vention of the FOIA statute.

Plaintiff's Brief, p. 42. Whereupon it filed a motion for sup-
plemental briefing following a hoped-for response to the afore-
said request. That motion has been denied. See Save Domestic
Oil, Inc. v. United States , 24 CIT , Slip Op. 00-46 (April
26, 2000).
Court No. 99-09-00558 Page 16

upon initial review of the ITA record and written submissions on

behalf of the parties in appearance, counsel for the defendant

were invited to consider consenting to remand to the agency for

reconsideration of the complex, competing positions. The defend-

ant declined, and continues to decline, to do so. See Hearing

Transcript ("Tr."), p. 23; Defendant's Response to the Court's

Inquiry Concerning Remand, p. 2 ("the Government is not willing

to consent to a remand").
II

Hence, the court is obligated to decide the controversy

engendered by the ITA's determination, which, in accordance with
the statute, issued within a brief period of time 17. Jurisdic-

tion is pursuant to 19 U.S.C. §1516a(a)(1)(A) and 28 U.S.C. §§

1581(c), 2631(c), 2632(c). The court's standard of review in a
case like this is provided by section 2640(b) of Title 28 to be

as specified in subsection (b) of section 1516a of Title 19, to

wit:

(1) Remedy

The court shall hold unlawful any determination,
finding, or conclusion found --

17
Indeed, the record reflects understandable concern about
its shortness, given the scope and arguable complexity of this
case. See, e.g., R.Doc 39 passim; R.Doc 215, pp. 7-8; R.Doc 337,
p. 3; Tr., pp. 5-6, 8, 11, 20-21, 41-42, 43. See also 64 Fed.-
Reg. at 44,481; Defendant's Response in Opposition to Plaintiff's
Motion for Judgment on the Agency Record ["Defendant's Brief"],
pp. 7, 26, 71; Brief of Defendant-Intervenor API Ad Hoc Free
Trade Comm., pp. 18, 47, 49 and 50, n. 193; Response Brief of
Defendant-Intervenor Saudi Arabian Oil Company, p. 39, n. 39;
Brief of Petroleos de Venezuela, S.A. and CITGO Petroleum Corp.,
pp. 10, 11; Brief of Defendant-Intervenor Petróleos Mexicanos et
al., pp. 18, 20, 22-23; Brief of Defendant-Intervenor BP Amoco
Corp., pp. 7, 9.
Court No. 99-09-00558 Page 17

(A) in an action brought under subparagraph
(A) . . . of subsection (a)(1) of this section,
to be arbitrary, capricious, an abuse of discre-
tion, or otherwise not in accordance with law . . ..

(2) Record for review

(A) In general
For the purposes of this subsection, the record,
unless otherwise stipulated by the parties, shall con-
sist of --

(i) a copy of all information presented
to or obtained by the [ITA] . . . during the
course of the administrative proceeding, in-
cluding all governmental memoranda pertaining
to the case and the record of ex parte meet-
ings required to be kept by section 1677f(a)(3)
of this title; and

(ii) a copy of the determination, all
transcripts or records of conferences or
hearings, and all notices published in the
Federal Register.

(B) Confidential or privileged material

The confidential or privileged status accorded
to any documents, comments, or information shall be
preserved in any action under this section. Notwith-
standing the preceding sentence, the court may exam-
ine, in camera, the confidential or privileged mater-
ial, and may disclose such material under such terms
and conditions as it may order. . . .18

18
The court is constrained to confirm persistent difficulty
in reviewing and thus reporting on the complete contents of the
record as compiled by the agency, perhaps due to the scope and
the complexity of SDO's eight country-specific petition volumes.
The ITA's most-reliable indexing seems to be that for Venezuela,
Inv. No. A-307-817, ergo the R.Doc numbers cited in this opinion
come from that antidumping investigation file. Moreover, certain
information which has now been received pursuant to CIT Rule 71-
(b)(3) ["At any time, the court may order any part of the record
retained by the agency to be filed"] is confidential and there-
fore not subject to publication herein.
Court No. 99-09-00558 Page 18

A

The crux of defendant's determination is that domestic

U.S. producers which opposed SDO's petition demonstrated that

their interests as such would be adversely affected by any im-
position of antidumping and/or countervailing duties, whereupon

their production of the domestic like product was counted against

the petition. But according to the statute, 19 U.S.C. §§ 1671a-

(c)(4)(B)(i), 1673a(c)(4)(B)(i), supra, such adverse counting

has been prescribed by Congress only when domestic producers

are related to foreign producers, as defined in 19 U.S.C. §

1677(4)(B)(ii), which provides:

(4) Industry . . .

(B) Related parties

(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 circum-
stances, be excluded from the industry.

(ii) For purposes of clause (i), a pro-
ducer and an exporter or importer shall be
considered to be related parties, if --

(I) the producer directly or indi-
rectly controls the exporter or importer,

(II) the exporter or importer direct-
ly or indirectly controls the producer,

(III) a third party directly or in-
directly controls the producer and the
exporter or importer, or
Court No. 99-09-00558 Page 19

(IV) the producer and the exporter or
importer directly or indirectly control a
third party and there is reason to believe
that the relationship causes the producer to
act differently than a nonrelated producer.

For purposes of this subparagraph, a party shall be
considered to directly or indirectly control an-
other party if the party is legally or operational-
ly in a position to exercise restraint or direction
over the other party.

Obviously, the dispositive concept of this provision

is control. While alluding to "serious questions about the suf-

ficiency of the petitioner's allegations" 19 in this regard, the
ITA nonetheless reached beyond those questions to decide the

clearly contingent issue of whether the allegedly-foreign-re-

lated petition opponents "would be adversely affected" by any
duties imposed herein. That approach did not follow the law on

its face, nor was the approach even the more expedient, given

the parties' presentations and the relatively few days in which
to resolve the tandem elements of sections 1671a(c)(4)(B)(i) and

1673a(c)(4)(B)(i) governing disregard of opposition by domestic

producers related to foreign producers.

On its part, SDO did allege that 15 of the 16 members

of the API Ad Hoc Committee are related to Petroleos de Vene-

zuela, S.A., that nine of those member companies are also re-

lated to the Mexican PEMEX enterprise(s), and that eight Com-
mittee companies are related to Saudi Aramco. See, e.g., R.Docs

14, 198, 207-10, 226-30, 243, 244, 287, 288, 290. None of the 16

19
64 Fed.Reg. at 44,482, col. 1.
Court No. 99-09-00558 Page 20

Committee members, however, was alleged to be related to Iraq's

state-owned oil business, but SDO did assert that ten of them do

import Iraqi crude, with nine companies alleged to import from

México, ten from Saudi Arabia, and also ten from Venezuela. See,
e.g., id.

With regard to Venezuela, the record does reflect busi-

ness relationships between Committee companies and enterprises

of that country 20, but it does not substantiate that those re-
ferred to by SDO entail the kind of control contemplated by

section 1677(4)(B)(ii), supra, nor did the ITA even attempt to

draw any conclusion to the contrary. The same is true with

respect to México 21 and Saudi Arabia 22. Unlike CITGO, Texaco

20
In fact, although not disclosed by the CIT Forms 13 re-
garding corporate affiliations and financial interest filed in
conjunction with the motion of Petroleos de Venezuela, S.A. and
CITGO Petroleum Corporation for leave to intervene as parties
defendant herein, the latter firm is wholly-owned by the former.
Neither is an Ad Hoc Committee member, however.
The types of relationships alleged by SDO to exist between
Committee companies and Venezuelan enterprises are debt-financ-
ing, designated-customer, joint-venture. See, e.g., R.Docs 14,
198, 207, 208, 210, 227-30, 243, 244, 287, 288, 290.
21
See, e.g., R.Docs 14, 207, 209, 210, 226, 227, 229, 230,
244, 287, 290.
22
Indeed, volumes IV and VIII of SDO's petition regarding
this nation undermine any claim of control of or by Committee
companies, and thus of any relationship within the purview of the
statute quoted in the text. That is, each volume states at the
outset:

Oil exploration and production in Saudi Arabia
began in the 1930s, when the Kingdom granted a con-
cession to the Standard Oil Company of California
(footnote continued)
Court No. 99-09-00558 Page 21

Inc., for example, is not a subsidiary in the United States

of Petróleos de Venezuela, S.A., nor is Petróleos Mexicanos a

vassal in its home country of Kerr-McGee Corporation. In short,
the failure to find controlling relationships between any of the

four national exporters implicated by SDO's petition and any of

the Committee companies made the agency resort to the secondary

standard of 19 U.S.C. §§ 1671a(c)(4)(B)(i), 1673a(c)(4)(B)(i)

inapposite and not in accord with the intent of Congress in

enacting it in URAA.

B
In general, the ITA has, and has had, discretion in

interpreting and administering the Trade Agreements Act of 1979.

And this Court of International Trade and its Court of Appeals
for the Federal Circuit have afforded Commerce continuing defer-

ence in carrying out its difficult statutory responsibilities.

(now Chevron). By the late 1940s, a joint venture of
U.S. firms, including Exxon, Texaco, Chevron, and
Mobil, created the Arabian American Oil Company, or
Aramco.

Saudi Arabia nationalized Aramco in 1976, giv-
ing the Saudi government full ownership of all hy-
drocarbon reserves and oil facilities in its terri-
tory. At first, Aramco remained an incorporated U.S.
company and was operated on a fee basis by its four
previous owners. However, in 1988 Aramco became the
Saudi Arabian Oil Company (Saudi Aramco), a Saudi-
registered, state-owned corporation, by Royal decree.
R.Doc 1, vol. IV, pp. 4-5; vol. VIII, p. 1 (footnotes omitted).
Each describes the current standing of the government company
under the Saudi Basic Law and its corporate statute. The de-
scription does not leave room for the concept of continuing
western control, nor is there ground for accepting herein a
claim of Saudi control over Exxon/Mobil, Texaco, Chevron, or
other multinational producers of crude oil.
Court No. 99-09-00558 Page 22

See, e.g., Nippon Steel Corp. v. United States , 219 F.3d 1348

(Fed.Cir. 2000); Mitsubishi Heavy Indus., Ltd. v. United States ,

24 CIT , Slip Op. 00-97 (Aug. 8, 2000). Indeed, various sec-

tions of the Trade Agreements Act, as amended, directly reflect

the intent of the legislature in this regard.

(1)

Sections 1671a(c)(4)(B)(ii), 1673a(c)(4)(B)(ii), supra,
which are at issue herein, state that the ITA "may" disregard the

position of domestic producers of a domestic like product who are

importers of the subject merchandise. In this matter, the agency
apparently determined to rely on its inapposite analysis under

preceding subsections (c)(4)(B)(i) that the API Ad Hoc Committee

companies, en masse, would be adversely affected by the impo-
sition of any antidumping or countervailing-duty order and thus

to not disregard their opposition to SDO's petition. But the

application of subsections (c)(4)(B)(ii) is distinct from that

of those preceding subsections and contingent upon the existing

facts and circumstances precisely relevant thereto.

Here, the following 1997 domestic production figures

(in thousands of barrels of crude oil) for the region represented

by SDO were disclosed to the ITA by the Ad Hoc Committee counsel

for the 16 members:

ARCO 63,592

BHP Petroleum 1,570

BP Amoco 81,395
Court No. 99-09-00558 Page 23

Burlington Resources 24,600

Chevron Corporation 71,905

Conoco Inc. 21,320

Exxon Corporation 53,290
Fina, Inc. 3,806

Kerr McGee Corporation 8,760

Marathon Oil Corporation 38,350

Mobil Corporation 44,895

Murphy Oil Corporation 3,650

Occidental Petroleum Corporation 18,980

Phillips Petroleum Company 20,075
Shell Oil Company 100,010

Texaco Inc. 79,244

R.Doc 205. Obviously, the variance is almost one to one hundred

(even without any accounting for the results of subsequent gov-

ernment acquiescence in the merger of Exxon and Mobil and now
ARCO with BP Amoco). As for imports from the four national

exporters singled out herein, SDO claims Committee companies

imported millions of barrels (in 1998) as follows:

ARCO 2,329,065

BP Amoco 69,744,565

Chevron Corporation 101,805,000

Conoco Inc. 55,530,735

Exxon Corporation 137,154,955
Fina, Inc. 38,652,040
Court No. 99-09-00558 Page 24

Marathon Oil Corporation 88,400,000
Mobil Corporation 120,487,595

Murphy Oil Corporation 33,852,655

Occidental Petroleum Corporation 63,480,435

Phillips Petroleum Company 37,707,785

Shell Oil Company 133,330,485

Texaco Inc. 198,559,635

Whatever the precise figures for a particular firm and calendar

year23, the magnitude of U.S. crude oil imports from around the
world, including Iraq, México, Saudi Arabia and Venezuela, is

notorious. In fact, the imports from just those four countries

exceeded, if not dwarfed, the above-listed domestic, regional
numbers for every individual Committee company save ARCO/BP

Amoco.24

This phenomenon indicates, of course, and the record

supports, that the Committee companies have an interest in this

case, but it by no means presages the ITA's determination not to
disregard their opposition to SDO's petition. To begin with, the

23
See R.Docs 198, p. 13; 207, p. 21; 208, p. 11; 210, p.
16; 226, p. 21; 227, p. 9; 229, p. 22; 230, p. 14; 243, p. 14;
244, p. 14; 287, p. 13; 290, p. 15; Plaintiff's Brief, pp. 11,
34. Import figures for these firms for 1997 can be derived
from publicly-available data of the Energy Information Admin-
istration of the U.S. Department of Energy and are, in most
cases, similar to the 1998 numbers.
24
The record does not reflect imports from the countries in
question on the part of BHP Petroleum, Burlington Resources, or
Kerr-McGee Corporation.
Court No. 99-09-00558 Page 25

domestic, regional industry which SDO attempts to represent con-

sists of more than 11,000 "independent", smaller-scale enter-
prises, a majority of whose oil wells and related workers have

been at a standstill 25. Their business, to the extent still via-

ble, is hardly in the same league with the truly global pursuit

and production of petroleum and its multiple, finished deriva-

tives by the "integrated", multinational members of the API Ad

Hoc Committee. To be sure, such economic disparity, however ex-
traordinary, should not be automatically dispositive under the

law governing a case like this, in particular where scale and
complexity increase, which is the situation of Committee compa-

nies. While Fina, Inc.'s domestic production, for example, is

but a fraction of the quantum of its imports, and ARCO's U.S.

production exceeds its imports from all four target nations by

some 60 million barrels, and the imports of Conoco, Murphy,

Occidental and Phillips combined therefrom do not equal those

of Texaco alone 26, the ITA not only acquiesced in the lumping of
all those apparently-disparate competitors together, it adopted

their Committee's above-quoted, composite arguments as to how

"members' interests as domestic producers would be adversely

affected by the imposition of antidumping or countervailing

duties." 64 Fed.Reg. at 44,482, col. 2. This lump-sum state-

ment was embraced without any reported agency analysis of per-

25
Compare R.Doc 215, p. 7 with Tr. at 44-45.
26
See R.Docs 205, 226. But see Brief of Defendant-In-
tervenor Texaco Inc., pp. 18-19.
Court No. 99-09-00558 Page 26

ceptible elements of any adverse effect due, for example, to po-

litical displeasure, real or feigned, on the part of the govern-

ment of Iraq, México, Saudi Arabia or Venezuela; to duties of

say 5 percent as opposed to fifty; to attempted redirection of

exports by one or more of those governments; to decreased de-

mand in the United States induced by the prospect of yet another

American impost. Cf. R.Doc 334 passim. Moreover, within the

realm of conflict of interest engendered by significant imports

on the part of firms also producing in PADDs I-IV but opposing

SDO, there was no ITA attempted differentiation between the
levels and resultant percentages of those imports, the capaci-

ties of Committee companies to draw upon sources available else-

where on Earth or in this country 27, or the degrees of competi-
tion among various members. Ibid. In fact, not all of those

companies actually subscribed to the composite Committee claim

that domestic prices would fall if any antidumping or counter-
vailing duty really were to be imposed. Compare id. at 4 with

27
To quote, for example, from the Brief of Petroleos de
Venezuela, S.A. and CITGO Petroleum Corporation, pages 15-16,
in this regard:

. . . [T]he major U.S. oil companies were not wedded to
the "allegedly dumped imports." They simply had too
many alternatives. As the experts explained, crude oil
is a worldwide . . . commodity that is produced around
the world and sold at prices dictated by the world mar-
kets. As the report of the Petroleum Industry Research
Foundation indicated, "replacement supplies appear to
be readily available." Thus, the major U.S. oil com-
panies did not need to import crude oil from the four
countries named in the petitions; they could obtain the
oil from a variety of other sources at the same prices.
Court No. 99-09-00558 Page 27

R.Doc 82, p. 3 and R.Doc 293, third page. Yet, the agency took

no final account of any difference of opinion.

When SDO then brought its complaint to this court, as

noted above, the API Ad Hoc Free Trade Committee duly moved for

leave to intervene as a party defendant, as did member companies

BP Amoco, Chevron, Exxon, Mobil, Shell and Texaco, each on its

own account. The Committee's motion was granted, but the court,
upon reading the ITA's published determination to dismiss sum-

marily SDO's petition, had no basis for determining how interven-

tion of those members would not be redundant, whereupon their

individual motions for leave to intervene were denied. See Save

Domestic Oil, Inc. v. United States , 23 CIT , Slip Op. 99-108

(Oct. 12, 1999). Each motion was renewed, gainsaying that the

Ad Hoc Committee represented the members on anything more than

"common interests", e.g.:

. . . Exxon [] relied on the Committee to represent
their common interests through the Committee's par-
ticipation in the proceedings before the . . . ITC
[] and the Department of Commerce . . ..
But while the Committee represented its mem-
bers' common interests, it did not represent its
members on those issues as to which a member's par-
ticular facts or circumstances were involved. In
this regard, Exxon itself participated actively in
the administrative proceeding below, and opposed
the initiation of an investigation. Toward that
end, it submitted Exxon-specific questionnaire re-
sponses to both the ITC and the Commerce Department,
responded to allegations that pertained solely to
Exxon . . . and provided additional Exxon-specific
data where it was called for . . ..
Court No. 99-09-00558 Page 28

Amended Consent Motion of Exxon Corporation to Intervene, pp. 2-

3 (emphasis in original). The renewed motions to intervene were

thereupon granted, confirming the Committee's inability to rep-

resent its members' individual interests.

(2)

As set forth above, the provision in the Trade Agree-

ments Act for disregard of the position of domestic producers of

a domestic like product which are importers of the subject mer-

chandise was expanded by the Uruguay Round Agreements Act. And

the record indicates that this case is the first in which the
ITA declined to disregard importer opposition. Cf. Defendant's
Brief, pp. 60-67; Tr., pp. 10-11. The Statement of Administrative

Action, which issued in conjunction with the URAA enhancement and

carries "particular authority" 28, explains:

Amended sections 702(c)(4)(B)(ii) and 732(c)-
(4)(B)(ii) also provide that, as under current prac-
tice, Commerce will not apply a bright line test to
determine whether a producer who is an importer of
the subject merchandise or who is related to an im-
porter of the subject merchandise should be excluded
from the domestic industry. Instead, it will look
to relevant factors, such as percentage of ownership
or volume of imports. For example, the exclusion of
a company that imports a small amount of subject mer-
chandise, by comparison with its total production,
will depend on whether that company and petitioners
have a common stake in the investigation. See Citro-
suco Paulista, S.A. v. United States , 704 F.Supp.
1075, 1085 (Ct. Int'l Trade 1988).

28
H.R. Doc. No. 103-316, vol. I, p. 656 (1994).
Court No. 99-09-00558 Page 29

H.R. Doc. No. 103-316, vol. I, pp. 858-59 (1994). In the case

cited with approval, which arose well before adoption of URAA

and involved imports of frozen concentrated orange juice from

Brazil, the court affirmed the ITA's reliance on 19 U.S.C. §
1677(4)(B), supra, to exclude producers from the "domestic in-

dustry" that derived a majority of their product from the im-

ports under investigation, that is, in excess of 50 percent. In

other words, the agency had taken the position
that firms with large imports of the allegedly dumped
or subsidized merchandise may be excluded from the
definition of the domestic industry, because they in-
herently lack the stake in the final investigation
being pursued by the petitioner.
12 CIT at 1206, 704 F.Supp. at 1085.

The parties agree herein that, since enactment of URAA,

three other proceedings encumbered the ITA with the issue at bar,

two earlier and one subsequent to the determination to dismiss

SDO's petition. See Ball Bearings and Parts Thereof From Thai-
land; Final Results of Changed Circumstances Countervailing Duty

Review and Revocation of Countervailing Duty Order , 61 Fed.Reg.

20,799, 20,801 (May 8, 1996) ("Objecting Parties cannot be said

to have a common 'stake' with the petitioner"); Initiation of
Antidumping Duty Investigations: Live Cattle from Canada and

Mexico, 63 Fed.Reg. 71,886 (Dec. 30, 1998) (opposition to pe-

tition by importer from México of some 10-15 percent of its

stock requirements disregarded); Initiation of Antidumping In-

vestigation: Citric Acid and Sodium Citrate From the People's
Court No. 99-09-00558 Page 30

Republic of China, 65 Fed.Reg. 1,588, 1,589 (Jan. 11, 2000)("The
Department has disregarded Proctor & Gamble, Inc.'s opposition

because . . . they are a major purchaser and user of domestic

and imported citric acid and sodium citrate").

This is the first case to have the issue considered

anew in court. On its part, the plaintiff takes the position

that those three matters reflect "consistent prior practice" and
"established precedents" 29, amounting to "traditional practice" 30,

and that the ITA had a duty to explain its departure from such

prior norm. Plaintiff's Reply Brief, p. 11, citing Atchison,
Topeka & Santa Fe Ry. Co. v. Wichita Bd. of Trade , 412 U.S. 800,

808 (1973). The defendant properly recognizes its duty in this

regard but also that it "is not obligated to adhere to the same

policies over time." Defendant's Brief, p. 62. Accordingly,
the ITA did not follow Citrosuco "because the peculiarities of

the oil industry did not warrant application of the same test."

Id. at 63. That is, the agency

found that the facts present in the oil industry
required the agency to consider factors other than
the level of imports. Specifically, Commerce noted
that "oil is a limited, non-renewable natural re-
source" and that "current U.S. demand cannot be sat-
isfied solely by increasing domestic production; it
can be satisfied only through a substantial level of
imports." "[W]hen fairly and sympathetically read
in the context of the entire opinion of the agency"
(Atchison, 412 U.S. at 809), these distinctions re-
veal that Commerce exercised its discretion in the

29
Plaintiff's Reply Brief, p. 11.
30
Id. at 15.
Court No. 99-09-00558 Page 31

Dismissal Determination in a manner consistent with
congressional intent.

Id. at 63-64 (footnote omitted).

While the world of petroleum may well be sui generis,

this alone does not necessarily confirm that the ITA's approach

was consistent with congressional intent. For example, the

government's own public data demonstrate that proved domestic

reserves were almost four times even last year's gross U.S.
consumption. 31 Moreover, domestic production in PADDs I-IV

during 1999 nearly equalled the 1,545,866,000 barrels of crude

oil imported from Iraq, México, Saudi Arabia and Venezuela and,

in fact, exceeded the 1,412,161,000 barrels imported from all
other countries. Included in that group is the largest single

exporter to the United States, Canada, not an OPEC member.

Nevertheless, the government quotes with approval the proposi-
tion of the Petroleum Industry Research Foundation, Inc.

("PIRINC") that affirmative relief for SDO in this case "would

'undermine the unity and effectiveness of OPEC, and non-OPEC

producers by adding incremental supply to the market' which

would, in turn, lead to lower prices." Defendant's Brief, p.

53, quoting R.Doc 269, Exhibit E, p. 3.

31
See U.S. Energy Info. Admin., U.S. Crude Oil, Natural
Gas, and Gas Liquids Reserves - 1998 Annual Report , pp. 19-26
(1998). Cf. M.A. Adelman, The Genie out of the Bottle, p. xxii
(1995)("World oil shortage is a fiction, but belief in this fic-
tion is a fact"); Thomas Gold, The Deep Hot Biosphere (1999).
Court No. 99-09-00558 Page 32

Whatever the geological and concomitant political re-

alities, Congress and Commerce both have referred to a "common

stake" in the economics underlying a given administrative pro-

ceeding as the dispositive test. And whether an importer passes

that test in order to have its opposition to a petition for im-

position of antidumping or countervailing duties counted neces-

sarily entails ITA consideration of that firm's level of imports

and resultant dependency thereon. For the agency not to have
administered its test on an individual basis was an abuse of its

discretion. As counsel for the API Ad Hoc Committee, itself, ar-
gued to the ITA, "expressions of support by oil industry associa-

tions are non-probative in these cases". R.Doc 321, p. 5.

C

That argument was directed at associations which sought

to support SDO's petition, one of which was the Independent Pe-

troleum Association of America ("IPAA"). It asserted that a "ma-
jority of its members engage in the exploration and production

of the domestic like product" 32 and therefore that it qualified
as an "interested party" under the statute. Responding to an
ITA questionnaire, IPAA claimed such status on the ground that

a majority of its members have offices in PADDs I-IV but that

it was unable to provide production figures for them within that

region. See R.Doc 148, QR p. 2. Whereupon, the ITA declined to

grant IPAA standing. See R.Doc 336, pp. 3-4.

32
R.Doc 336, p. 1.
Court No. 99-09-00558 Page 33

The Trade Agreements Act definition of an "interested

party" is, in pertinent part, as follows:

(C) a manufacturer, producer, or wholesaler in
the United States of a domestic like product,

(D) a certified union or recognized union or
group of workers which is representative of an in-
dustry engaged in the manufacture, production, or
wholesale in the United States of a domestic like
product,

(E) a trade or business association a majority
of whose members manufacture, produce, or wholesale
a domestic like product in the United States,

(F) an association, a majority of whose members
is composed of interested parties described in sub-
paragraph (C), (D), (E) with respect to a domestic
like product . . ..

19 U.S.C. §1677(9). In tying such status to a domestic like

product, clearly Congress intended to provide in a case such

as this for associations like IPAA. See, e.g., S.Rep. No. 96-
249, p. 90 (1979). And the ITA did not proceed otherwise 33,
witness its seemingly-spontaneous embrace 34 of the API Ad Hoc
Committee. Rather, the agency properly required IPAA to prove

the necessary connection to the regional domestic like product.

While IPAA initially was unable to obtain the requisite informa-

tion, it may still be able to establish on remand that its mem-

bers are regional producers.

33
See id. at 2-3.
34
Cf. Letter from Robert J. Heilferty, Esq. to the Court
(Aug. 31, 2000).
Court No. 99-09-00558 Page 34

(1)

In enacting URAA, Congress also clearly indicated its

intent that "labor have equal voice with management in supporting

or opposing the initiation of an investigation." H.R. Rep. No.

103-826, pt. 1, p. 48 (1994).

If workers are represented by a union, Commerce will
count the production of those firms whose workers are
represented by the union as being for or against the
petition in accordance with the workers' position.
If the management of a firm expresses a position in
direct opposition to the views of the workers in that
firm, Commerce will treat the production of that firm
as representing neither support for nor opposition to
the petition.

Id. A regulation of the Department, 19 C.F.R. § 351.203(e)(5)

(1999), provides that, in conducting a poll of an industry, the

ITA "will include unions, groups of workers, and trade or busi-

ness associations."

Here, the record reflects an attempt by the agency,
pursuant to 19 U.S.C. §§ 1671a(c)(4)(D), 1673a(c)(4)(D), supra,

to poll each of the 410 largest producers in PADDs I-IV, which

account for over 86 percent of the production therein, and 401

of the remaining producers in the region. See 64 Fed.Reg. at
44,481-82. The ITA reports receipt of responses from 41 percent

of the "companies" comprising the first group and from 18 percent

of the sampled 401 "companies". Id. at 44,482, col. 1. There is

no indication that the agency, contrary to its own regulation and
Court No. 99-09-00558 Page 35

the intent of the governing statute, made any attempt to poll

production workers at those particular firms, nor did it other-

wise determine where labor stands vis-à-vis SDO's petition. See

R.Doc 215, pp. 8-9; R.Doc 331, p. 2.

The U.S. Department of Labor reports that the petroleum

industry experienced a sharp decline in domestic exploration and

production and an extended period of downsizing and restructur-
ing, losing almost 390,000 jobs from 1982 to 1995, as contrasted

with some 339,000 still existent wage and salary jobs in 1998.

U.S. Dep't of Labor Bulletin 2523, Career Guide to Industries

2000-01 Edition, p. 34 (Jan. 2000). Moreover, that Department

projects an additional, overall 17 percent decline through the

year 2008. Cf. id. at 35. As for the positions found still

active, the Bureau of Labor Statistics reports about 60 percent

in 1999 were in just four states, three of which, Louisiana,

Oklahoma and Texas, are within the ITA's designated region [ id.
at 34]; more than seven out of ten establishments employ fewer

than ten workers, although more than half of all workers in the
industry are employed in settings of 50 or more [ id.]; and
[f]ew industry workers belong to unions. In fact,
only about 4 percent of workers were union members
or covered by union contracts in 1998 . . ..

Id. at 36.

Be that last statistic as it is, the Paper, Allied-

Industrial, Chemical & Energy Workers International Union, AFL-
Court No. 99-09-00558 Page 36

CIO, CLC ("PACE") came forward with an expression of support for

SDO, whereupon it was served with an ITA questionnaire "to as-

certain whether the union qualifies as an interested party and,

if so, how to account for its support." R.Doc 337, p. 1. PACE
claimed support emanating from members in the employ of ten com-

panies. The ITA disregarded the pipeline workers at four of

those firms because they "are involved solely in transporting

crude oil" and thus are not "engaged in the production of crude

oil (i.e., operating the wells)." Id. at 3. That nuance appar-

ently does not exist with respect to the other six companies,

but the agency also took no account of their production workers'

indicated support of SDO on the ground that their chosen union
representative failed to provide requested information, viz.:

. . . [W]ithout production data for the specific
facilities at which PACE represents workers en-
gaged in the production of crude oil, we have no
way of accounting for its support.
Id.

The plaintiff complains that the ITA should have ac-

counted for the workers' support at all ten firms. It argues
that the managements of those companies are possessed of the

production data requested by the agency and that their workers

"should not have been penalized simply because the data w[ere]

wholly in management[] hands." Plaintiff's Reply Brief, pp. 19-

20. It claims that, since the agency decided to conduct a poll

of the industry, it was arbitrary and capricious to have done

so without
Court No. 99-09-00558 Page 37

eliciting information about worker support for the
petition or . . . determining the production of
crude oil by those companies whose workers support-
ed the petition.

Id. at 20. And the plaintiff also argues that pipeline workers

are an integral part of the production of petroleum and that the

production of the four firms where PACE members work should

therefore have been taken into account by the ITA.

Indeed, it is hard to imagine meaningful "production"

of the liquid raw material that is crude petroleum oil without

its passage through pipe, often arrayed in lines for miles,
whether near or in the Persian Gulf, the Gulf of México, or any-

where else, yet the court notes that the workers who man those

pipelines are not necessarily classified by the government with

their brethren who engage in "oil and gas extraction". Compare,

e.g., Executive Office of the President, Office of Mgmt. & Budg-

et, North American Industry Classification System - United States

1997, pp. 67-68 (1998) with id. at 478-79. This is not to state

that, had the ITA counted PACE's members at the four domestic
companies involved in transporting crude oil as properly aligned

in support of SDO's petition, such approach would have violated

the Trade Agreements Act, as amended, supra. On the other hand,

given that statute and the clear intent of Congress in enacting

URAA, this court concludes that it was not in accordance with

law for the agency to have failed to account at all for the views

of labor in this case.
Court No. 99-09-00558 Page 38

(2)

Under the statute as set forth above, standing is tied
to a domestic like product, which Congress has defined to mean

a product which is like, or in the absence of like,
most similar in characteristics and uses with, the
article subject to an investigation[,]

19 U.S.C. §1677(10), and which the ITA determined to define here-

in as "crude petroleum oils and oils obtained from bituminous
minerals testing at, above, or below 25 degrees A.P.I." 64

Fed.Reg. at 44,480, col. 3. In doing so, the agency confirmed
that the class or kind of merchandise to be investigated "norm-

ally will be . . . as defined in the petition" 35 and also con-
firmed that it followed that practice herein, thereby rejecting

attempts by interested parties to have refined products and
"lease condensates" also considered the domestic like product.

Id. at 44,481, cols. 2-3. The inclusion of either could have

an impact on this case, given the support for, and nature of
the opposition to, SDO's petition.

With regard to refined products, there is little on

the record to support the proponents of inclusion. Indeed, the

plaintiff argues that refining needs and expectations, much of

them offshore, are what genuinely motivate the Ad Hoc Committee

35
64 Fed.Reg. at 44,481, col. 2.
Court No. 99-09-00558 Page 39

companies in opposition to its petition, not their domestic pro-
duction of the raw material SDO's members capture. 36

Be that part of the ITA's determination as it is, Com-

mittee companies also urged the inclusion of "lease condensates",

which position engendered the following reported discussion:

The issue of whether "lease condensates" are
included properly within the domestic like product
is more complicated. Lease condensates consist es-
sentially of a mixture of certain hydrocarbon com-
pounds that, in terms of weight and complexity, fall
between natural gas and crude oil. They are liquids
formed from natural gas as a result of temperature or
pressure changes. Often lease condensates are mixed
with crude oil and the resulting mixture is sold to a
refinery as crude oil.

The petitioner argues that the Department should
not include lease condensates in the domestic like
product because the mixture of hydrocarbon compounds
in lease condensates is different from the mixture of
hydrocarbon compounds in crude oils. Consequently, it
asserts, lease condensates can only be refined into a
limited range of products. Opposing the petitioner's
position, other parties have argued that lease conden-
sates are very similar in physical characteristics and

36
Compare Plaintiff's Brief, pp. 28-30 with R.Doc 82, p. 9
("If Chevron's access to foreign crude at competitively set mar-
ket prices is restricted, the cost of operating our U.S. refiner-
ies that cannot run domestic crudes efficiently will increase")
and R.Doc 180, p. 5 ("Shell is vitally concerned with events --
such as the extraordinary import duties sought by the petition-
er[] in these proceedings -- that threaten . . . to deprive
Shell's refining operations of access to essential crude oil sup-
plies") and Confidential Record Document ("ConfDoc") 49, p. 2
("the imposition of additional tariffs or countervailing duties
would have the potential of negatively impacting domestic refin-
ers. Phillips . . .") and ConfDoc 79, p. 61 ("These duties would
increase Mobil's supply and production costs for gasoline, avia-
tion fuel, lubricants and other petroleum products and petro-
chemicals in the United States").
Court No. 99-09-00558 Page 40

uses to light crude oil and that, when mixed, they
simply become an indistinguishable part of the crude-
oil stream which is sent to the refinery.

In addition to the extremely complex technical
nature of the issue, ascertaining the precise nature
of available production and distribution data as well
as attempting to establish the appropriate analytical
framework for a very diverse industry has been proble-
matic for the Department. However, it is not necessary
to decide this issue because . . . we have determined
that the petitioner does not have the requisite indus-
try support, regardless of how the issue of lease con-
densates is resolved.

Id. Given that this case must be remanded for reconsideration

by the agency, decision of this issue may become necessary. For

example, if, as SDO contends, lease condensates are not found

in its members' domestic product, but prove to be part of the
product obtained domestically by Committee companies, then that

part may have to be discounted in the opposition of those pro-

ducers to the petition.

III

Perhaps, the "extremely complex technical nature" of

the lease-condensates issue was exacerbated by the limited time

afforded the ITA by the statute. But expeditious, generally-

affirmative initial action, has been the mandate of Congress

since 1979. That is, the intent of the Trade Agreements Act
has been that the agency

act upon all petitions which, based upon facts reason-
ably available to petitioner, make reasonable allega-
tions of the presence of the elements necessary for
the imposition of a . . . duty . . .. Consequently,
the Committee expects that the [ITA] will act upon
most petitions, rejecting only those which are clear-
Court No. 99-09-00558 Page 41

ly frivolous, not reasonably supported by the facts
alleged or which omit important facts which are rea-
sonably available to the petitioner.

H.R. Rep. No. 96-317, p. 51 (1979). And this expectation of Con-

gress has been realized almost one thousand one hundred times

since then, with only one petition having been summarily reject-

ed over the past 20 years on reasoning remotely similar to that
herein, and notwithstanding subsequent judicial appreciation of

the ITA's limited time for rendering a determination. E.g., Fu-

jitsu Ltd. v. United States , 23 CIT , , 36 F.Supp.2d 394,

401 (1999), and cases cited therein.

Of course, the fact that at least preliminary ITA (and
ITC) investigation ensues in the "vast majority of cases", to

quote from the reported URAA contemplation of Congress regarding

initial agency time to consider petitions upon filing, H.R. Rep.

No. 103-826, pt. 1, p. 49 (1994), does not necessarily lead to
any affirmative final antidumping or countervailing-duty relief.

And this court is neither at liberty nor able to project the out-

come(s) of any agency investigation(s) in this case, which may

genuinely entail phenomena beyond the hale of the 1979 Act.

Suffice it to state at this stage, however, that the ITA's

dismissal of SDO's petition, as described and discussed above,

was not in accordance with law. Ergo, plaintiff's motion for

judgment upon the agency record developed to date must be, and

it hereby is, granted.
Court No. 99-09-00558 Page 42

This case is hereby remanded to Commerce for contempla-

tion of commencement of a preliminary investigation by its ITA

(and referral for such an investigation by the ITC) in accordance

with law, as set forth hereinabove. The defendant may have 60
days from the date hereof for this purpose. To the extent, in

the exercise of its sound discretion during that time, the agency

determines to reconsider its analysis of any of the threshold

issues raised by the petition, including the nature of SDO's

domestic product vis-à-vis that of other domestic producers and

support for, and opposition to, the petition on the part of do-

mestic producers and workers, the ITA may call upon the inter-
ested parties to supplement the record, and also upon the U.S

Departments of Labor and of Energy for relevant, publicly-avail-

able data not yet part of the record. If the stated opposition

of the API Ad Hoc Free Trade Committee is still sought to be

taken into account, the agency is hereby directed to consider
the facts and circumstances of the business of each Committee

company, standing on its own, including most necessarily that

particular company's imports of crude petroleum oil from Iraq,

México, Saudi Arabia or Venezuela.

If the result of this remand is not initiation of pre-

liminary investigation(s) by the ITA (and the ITC), the written

reasons therefor are to be filed with the court on or before the

close of the aforesaid 60-day period, whereupon the parties here-
Court No. 99-09-00558 Page 43

to may have 30 days to serve and file comments thereon, with any

replies thereto due within 15 days thereafter.

So ordered.

Decided: New York, New York
September 19, 2000

______________________________
Judge