United States Court of Appeals for the Federal Circuit
2007-1552
MITTAL STEEL POINT LISAS LIMITED
(formerly known as Caribbean Ispat Limited),
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant-Appellee,
v.
GERDAU AMERISTEEL CORP.
and KEYSTONE CONSOLIDATED INDUSTRIES, INC.,
Defendants-Appellants.
Mark A. Moran, Steptoe & Johnson LLP, of Washington, DC, argued for plaintiff-
appellee. With him on the brief was Alexandra E.P. Baj. Of counsel were Jamie B.
Beaber and Susan R. Gihring.
James M. Lyons, General Counsel, Office of the General Counsel, United States
International Trade Commission, of Washington, DC, argued for defendant-appellee. With
him on the brief were Andrea C. Casson, Assistant General Counsel for Litigation, and
Marc A. Bernstein, Attorney.
Kathleen W. Cannon, Kelley Drye & Warren LLP, of Washington, DC, argued for
defendants-appellants. With her on the brief were Paul C. Rosenthal and R. Alan Luberda.
Appealed from: United States Court of International Trade
Senior Judge Thomas J. Aquilino, Jr.
United States Court of Appeals for the Federal Circuit
2007-1552
MITTAL STEEL POINT LISAS LIMITED
(formerly known as Caribbean Ispat Limited),
Plaintiff-Appellee,
v.
UNITED STATES,
Defendant-Appellee,
v.
GERDAU AMERISTEEL CORP.
and KEYSTONE CONSOLIDATED INDUSTRIES, INC.,
Defendants-Appellants.
Appeal from the United States Court of International Trade in case no.
02-00756, Senior Judge Thomas J. Aquilino, Jr.
___________________________
DECIDED: September 18, 2008
___________________________
Before BRYSON and PROST, Circuit Judges, and ZAGEL, District Judge. *
BRYSON, Circuit Judge.
Gerdau Ameristeel Corp. and Keystone Consolidated Industries, Inc., (jointly,
“Gerdau”) appeal from the judgment of the Court of International Trade upholding a final
*
Honorable James B. Zagel, District Judge, United States District Court for
the Northern District of Illinois, sitting by designation.
determination by the International Trade Commission. The issue on appeal is whether,
on remand from a prior appeal to this court, the Commission was compelled by our
remand instructions and prior decisions of this court to conclude that less than fair value
(“LTFV”) imports of steel wire rod from Trinidad and Tobago did not cause a material
injury to a domestic industry. We hold that the Commission was not compelled to reach
that conclusion. We therefore vacate the judgment of the Court of International Trade
and remand the case to that court with instructions to remand the case to the
Commission.
I
This appeal arises out of an antidumping investigation that began in August 2001
when several domestic producers of steel wire rod filed antidumping petitions with the
Commission. In their petitions, the domestic producers alleged that LTFV imports of
steel wire rod from 12 countries, including the Republic of Trinidad and Tobago, had
caused material injury to the domestic industry. In its first final determination, the
Commission concluded that LTFV imports from the 12 countries had caused material
injury to the domestic industry. The Commission further determined that the evidence
supported a finding that LTFV imports from Trinidad and Tobago alone had caused
material injury to the domestic industry.
Mittal Steel Point Lisas Ltd., formerly known as Caribbean Ispat Ltd., appealed
the Commission’s final determination to the Court of International Trade. In that appeal,
Mittal challenged the Commission’s interpretation of a provision of the Caribbean Basin
Economic Recovery Act (“CBERA”), 19 U.S.C. § 1677(7)(G)(ii)(III). The Court of
International Trade upheld the Commission’s final determination, agreeing with the
2007-1552 2
Commission that CBERA prohibits the Commission from considering the effects of
LTFV imports from non-CBERA countries when assessing whether subject imports from
Trinidad and Tobago caused material injury to the domestic industry. Caribbean Ispat
Ltd. v. United States, 366 F. Supp. 2d 1300 (Ct. Int’l Trade 2005).
On appeal, we held that “the Court of International Trade erred by concluding
that the Commission was prohibited from considering the effects of LTFV imports from
non-CBERA countries when it assessed imports from Trinidad and Tobago.” Caribbean
Ispat Ltd. v. United States, 450 F.3d 1336, 1341 (Fed. Cir. 2006). We therefore
remanded the case for further proceedings in light of that holding. In addition, we
directed the Commission to take into account our then-recent decision in Bratsk
Aluminum Smelter v. United States, 444 F.3d 1369 (Fed. Cir. 2006). In Bratsk, this
court held that “whenever the antidumping investigation is centered on a commodity
product, and price competitive non-subject imports are a significant factor in the
market,” the Commission is required “to explain why—notwithstanding the presence and
significance of the non-subject imports—it concluded that the subject imports caused
material injury to the domestic industry.” Id. at 1375.
Based on the decision in Bratsk, we instructed the Commission “to make a
specific causation determination and in that connection to directly address whether
[other LTFV imports and/or fairly traded imports] would have replaced [Trinidad and
Tobago’s] imports without any beneficial effect on domestic producers.” Caribbean
Ispat, 450 F.3d at 1341 (quoting Bratsk, 444 F.3d at 1375).
On remand, the Commission first considered the statutorily mandated present
material injury factors specified in 19 U.S.C. § 1677(7)(B)(i):
2007-1552 3
(I) the volume of imports of the subject merchandise,
(II) the effect of imports of that merchandise on prices in the United States
for domestic like products, and
(III) the impact of imports of such merchandise on domestic producers of
domestic like products, but only in the context of production operations
within the United States . . . .
The Commission found that each of those factors favored a finding of material injury by
reason of subject imports from Trinidad and Tobago. In its analysis of the price effects
and the impact of Trinidadian imports, the Commission found that the injury to the
domestic industry could not be entirely explained by the market presence of non-subject
imports and non-Trinidadian subject imports. The Commission therefore concluded that
subject imports from Trinidad and Tobago had caused material injury to the domestic
industry “based on the significant and increasing volume and market share of subject
imports from Trinidad and Tobago in a shrinking market, significant price underselling
and significant price suppression by these imports, and declining industry indicators
from 1999 to 2001.”
With respect to the question whether the domestic industry was threatened with
material injury in the foreseeable future, the Commission found that Mittal had the ability
to increase its exports to the U.S.; that the subject imports from Trinidad and Tobago
had undersold the prices for the domestic like product and were likely to continue to
have a significant suppressing effect on domestic prices; and that the subject imports
were likely to have a negative effect on the domestic industry’s production and
development efforts. For those reasons, the Commission found “a likelihood of
continued imminent injury to the domestic industry from subject imports from Trinidad
and Tobago.” The Commission therefore concluded that “application of the statutorily-
2007-1552 4
mandated threat factors, as well as of the statutorily-mandated present material injury
factors each would have led us to an affirmative determination.”
Despite reaching that conclusion, the Commission stated that it could not issue
an affirmative determination of material injury by reason of the subject imports because
of this court’s remand instructions relating to the requirements of Bratsk. First, the
Commission stated that our remand instructions seemed to require the Commission to
treat all steel wire imports as fungible commodity products. Next, the Commission
determined that the record supported a finding that non-Trinidadian imports were
present in significant quantities and were a significant factor in the U.S. market. The
Commission then turned to the question whether non-Trinidadian imports would have
replaced Trinidadian imports and, if so, whether the absence of imports from Trinidad
and Tobago would have had any beneficial effect on domestic producers during the
period of investigation.
In addressing that issue, the Commission first concluded that the record
supported a determination that producers in countries other than Trinidad and Tobago
had sufficient capacity that they “could have, if so inclined, exported sufficient volumes
to the U.S. during the [period of investigation] to fully replace subject imports from
Trinidad and Tobago.” While the Commission found that non-Trinidadian imports had
the capacity to replace imports from Trinidad and Tobago, however, it stated that it was
unable to conclude that those non-Trinidadian imports would have replaced subject
Trinidanian imports. The Commission explained that it was unable to make that finding
because of the lack of evidence in the record on that issue. Nonetheless, the
Commission invoked a presumption that the subject imports would have been replaced.
2007-1552 5
It applied that presumption based on its perception that this court had required the
Commission to make a negative determination unless evidence in the record supported
the conclusion that “non-subject imports would not have replaced subject imports or if
they would have replaced them, would not have resulted in a benefit to the domestic
industry.” The Commission added that this court “appears to have created a
presumption under the Bratsk replacement/benefit test that if a foreign producer could
‘replace’ subject imports, it would.”
The Commission next turned to the question whether there would have been any
benefit to the domestic industry if subject imports had been absent from the market.
The Commission found that the “low prices or average unit values at which many [non-
Trinidadian] imports entered the United States” weighed against a finding that the
removal of the Trinidadian imports would have resulted in a benefit to the domestic
industry. The Commission therefore determined that the domestic industry was not
materially injured by reason of the subject imports. In so doing, however, the
Commission made clear that it was reaching that conclusion only because it believed it
was compelled to by the analysis required under Bratsk. The Commission stated that
“we believe the Federal Circuit’s decision in Bratsk and its remand order in this case
compel us to reach a negative determination in this investigation, even though we
believe an affirmative determination is consistent with the statute and supported by the
factual record.” Finally, the Commission noted that its conclusion with respect to the
causation analysis applied equally to its analysis of whether there was a threat of
material injury by reason of subject imports from Trinidad and Tobago.
2007-1552 6
Commissioners Koplan and Lane dissented from the Commission’s analysis of
Bratsk. In their view, the Commission majority had erred in considering the steel wire
rod under investigation to be a commodity product. For that reason, they stated that
they would have issued an affirmative determination.
On appeal from the Commission’s negative determination, the Court of
International Trade affirmed. The court ruled that the Commission had conducted the
remand proceedings as this court directed and that the court could not agree with the
appellants “that the agency record, such as it still is, does not support [the
Commission’s] specific causation determination.” Mittal Steel Point Lisas Ltd. v. United
States, 495 F. Supp. 2d 1374, 1380 (Ct. Int’l Trade 2007).
II
Gerdau challenges the Commission’s negative determination on a number of
grounds. First, Gerdau argues that the “replacement/benefit test” applied by the
Commission, based on its understanding of this court’s decision in Bratsk, lacks
statutory support and therefore is not in accordance with law. Second, Gerdau
challenges the Commission’s conclusion that this court made a factual finding with
respect to the interchangeability of the steel wire imports at issue in the investigation.
Third, Gerdau argues that the Commission erred in applying a rebuttable presumption
that imports from Trinidad and Tobago would have been replaced by imports from
countries having the capacity to replace the Trinidadian imports. Finally, Gerdau argues
that the Commission misapplied the “replacement/benefit test” in connection with its
threat determination.
2007-1552 7
The Commission responds that, although it regards this court’s remand
instructions as reflecting an incorrect interpretation of the antidumping statute, its
negative determination should be upheld because it faithfully applied the remand
instructions in this case and the more general directions provided by this court’s
decision in Bratsk. Mittal supports the Commission’s negative determination, arguing
that the Commission correctly applied the principles of Bratsk and that those principles
are not in conflict with the antidumping statute.
The Commission begins its argument by setting forth its contention that, apart
from requiring that the Commission consider the three factors specified in section
1677(7)(B)(i), the antidumping statute does not require the Commission to perform any
further analysis when determining whether a material injury was “by reason of” subject
imports. In addition to those three “mandatory” factors—the volume of subject imports,
the effect of those imports on prices in the United States, and the impact of those
imports on domestic producers—section 1677(7)(B)(ii) provides that the Commission
“may consider such other economic factors as are relevant to the determination
regarding whether there is material injury by reason of imports.” Because the language
of section 1677(7)(B)(ii) is permissive, the Commission argues that it has discretion to
go beyond the three factors set forth in section 1677(7)(B)(i), but it is not required to do
so.
While the Commission is correct that section 1677(7)(B)(ii) affords it discretion to
consider factors other than the three factors set forth in section 1677(7)(B)(i), that
discretion is not unbounded, but is subject to general principles of administrative law. In
particular, the Commission would abuse its discretion if, by ignoring a relevant
2007-1552 8
economic factor that it could consider under section 1677(7)(B)(ii), the Commission
“entirely failed to consider an important aspect of the problem.” Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); see Timken U.S. Corp.
v. United States, 421 F.3d 1350, 1355-56 (Fed. Cir. 2005) (applying that principle to an
antidumping determination and citing other cases applying the same principle in the
same context). In making its determination as to whether the harm to the domestic
injury occurred “by reason of” the LTFV imports, the Commission was required to
“examine the relevant data and articulate a satisfactory explanation for its action.”
Motor Vehicle Mfrs. Ass’n, 463 U.S. at 43; see also 19 U.S.C. § 1677(7)(B) (“In the
notification required under section 1671d(d) or 1673d(d) of this title, as the case may
be, the Commission shall explain its analysis of each factor considered under clause (i),
and identify each factor considered under clause (ii) and explain in full its relevance to
the determination.”).
While the Commission may not enter an affirmative determination unless it finds
that a domestic industry is materially injured “by reason of” subject imports, the
Commission is not required to follow a single methodology for making that
determination. In United States Steel Group v. United States, 96 F.3d 1352 (Fed. Cir.
1996), this court emphasized the Commission’s broad discretion with respect to its
choice of methodology. The court stated:
This court has no independent authority to tell the Commission how to do
its job. We can only direct the Commission to follow the dictates of its
statutory mandate. So long as the Commission’s analysis does not violate
any statute and is not otherwise arbitrary and capricious, the Commission
may perform its duties in the way it believes most suitable.
Id. at 1362; see also S. Rep. No. 96-249, at 75 (1979), as reprinted in 1979
U.S.C.C.A.N. 381, 461 (“The determination of the ITC with respect to causation is,
2007-1552 9
under current law, and will be, under [19 U.S.C. § 1673d], complex and difficult, and is a
matter for the judgment of the ITC.”).
In reviewing an affirmative injury determination for substantial evidence, this
court requires evidence in the record “to show that the harm occurred ‘by reason of’ the
LTFV imports, not by reason of a minimal or tangential contribution to material harm
caused by LTFV goods.” Gerald Metals, Inc. v. United States, 132 F.3d 716, 722 (Fed.
Cir. 1997). In analyzing the issue of causation, the Commission has broad authority to
consider “any relevant factors.” Allegheny Ludlum Corp. v. United States, 287 F.3d
1365, 1376 (Fed. Cir. 2002). Our review of the Commission’s causation analysis in
antidumping cases is therefore limited to whether the Commission complied with certain
minimum requirements imposed by statutory provisions and principles of administrative
law.
We applied the principles described above in our decisions in Gerald Metals and
Bratsk. In Gerald Metals, we reviewed an affirmative determination by the Commission,
subsequently sustained by the Court of International Trade, that Russian, Ukrainian,
and Chinese magnesium imports caused material injury to the domestic industry. 132
F.3d at 716. Gerald Metals appealed that determination with respect to LTFV Ukrainian
imports. On appeal, this court observed that the record supported an inference that
fairly traded Russian imports were substitutes for the subject Ukrainian LTFV imports.
Id. at 720-21. We concluded that the Commission “fail[ed] to incorporate the undisputed
facts about fairly-traded imports into its analysis of the harm caused by reason of the
cumulated LTFV imports.” Id. at 720. In its review, the Court of International Trade had
found no evidence in the record to support Gerald Metals’ argument that “fairly-traded
2007-1552 10
Russian imports would have replaced all or the greater part of the subject imports.” Id.
at 721. After reviewing the record, however, we held that we could not affirm the
decision of the Court of International Trade without further explanation of whether fairly
traded Russian imports would have replaced the subject imports. Id. Because the
record on appeal did not support the conclusion that LTFV imports “were the reason for
the harmful effects to the domestic magnesium industry,” we remanded the case to the
Court of International Trade. Id. at 722-23. Noting that the statute “requires adequate
evidence to show that the harm [to the domestic industry] occurred ‘by reason of’ the
LTFV imports, not by reason of a minimal or tangential contribution to material harm
caused by LTFV goods,” we held that the failure of the Court of International Trade “to
consider properly the presence of fairly-traded Russian imports” rendered the court’s
decision erroneous. Id.
In Bratsk, we held that the Commission had failed to consider an important
aspect of the causation analysis under Gerald Metals when it did not address whether
non-subject imports would have replaced the subject imports at issue—silicon metal
imports from Russia. 444 F.3d at 1375. We acknowledged in Bratsk that “there may
[have been] support for the Commission’s ultimate determination in the record,” but we
found that the Commission did not provide a satisfactory explanation for its affirmative
determination. Id. Instead of considering whether non-subject imports would have
replaced the subject imports, the Commission had limited Gerald Metals to its “unique
facts.” Id. We therefore remanded the case for the Commission to include in its
causation analysis a determination as to whether non-subject imports would have
replaced subject imports without any benefit to the domestic industry. Id. at 1376.
2007-1552 11
In this case, as in Bratsk, the Commission’s first final determination “did not
specifically address whether Trinidad and Tobago’s imports could or would be replaced
by other imports so that the domestic industry would not benefit from the removal of
Trinidad and Tobago’s imports from the U.S. market.” Caribbean Ispat, 450 F.3d at
1341. On remand, the Commission analyzed whether other imports would have
replaced subject imports from Trinidad and Tobago. At the conclusion of that analysis,
the Commission issued a negative determination as to whether the domestic industry
had been injured by reason of the subject imports but, as noted, the Commission made
clear that it reached that conclusion only because it felt compelled to do so by the terms
of this court’s remand instructions and the analytical approach required by Bratsk.
We think the Commission interpreted this court’s remand instructions and the
decision in Bratsk too rigidly, in three respects. First, the Commission viewed our
remand instructions as foreclosing it from making a finding as to one of the “triggering
factors” for applying the Bratsk analysis—the question as to whether the merchandise
subject to investigation was a commodity product. Second, the Commission interpreted
the Bratsk analysis as looking to whether an antidumping order would result in a benefit
to the domestic industry by eliminating the subject imports from the market in the future,
rather than looking to whether the hypothetical removal of the LTFV subject imports
would have resulted in their replacement by non-subject or non-LTFV imports with no
resulting benefit to the domestic industry. Third, the Commission interpreted Bratsk as
adopting a rebuttable presumption that subject imports would be replaced by non-
subject imports and, absent an affirmative showing to the contrary, requiring the
Commission to make a negative determination. We now address each of these issues.
2007-1552 12
A
In the remand proceedings, the Commission found that the products at issue
comprise “a continuum of at least 11 major categories of products, ranging from low
carbon wire rod such as industrial wire rod used for nails and coat hangers, to medium
to high carbon wire rod.” Notwithstanding that finding, the Commission concluded that
our decision in the prior appeal in this case had already resolved the issue of fungibility
and foreclosed the Commission from making a contrary finding that the products were
not fungible. The Commission stated that our opinion “appear[ed] to assume that wire
rod is a ‘commodity’ product as defined in Bratsk, since it stated that the task remaining
before the Commission is to conduct the replacement/benefit test, not to analyze
whether the threshold factors in Bratsk have been met.”
Our prior decision did not purport to make a factual finding that all steel wire rod
imports at issue in the Commission’s investigation were fungible and therefore should
be treated as commodity products for purposes of the Bratsk analysis. Rather, we
simply observed that “the Commission found a ‘high level of fungibility between subject
imports from Trinidad and Tobago and the domestic product, and between subject
imports from Trinidad and Tobago and imports from each of the other subject
countries.’” Caribbean Ispat Ltd., 450 F.3d at 1341 (quoting the final determination of
the Commission). While we may have assumed, based on the quoted language from
the Commission’s earlier determination, that the Commission’s finding with respect to
the commodity nature of the products would likely be the same as its finding with
respect to cumulation, the Commission has explained in some detail why the two are
not necessarily the same. If we were wrong in our assumption as to what the
2007-1552 13
Commission’s finding would be with respect to the commodity issue, it was the
Commission’s prerogative to say so.
The Commission, and not this court, is the finder of facts in antidumping
investigations, and it is up to the Commission to make findings of fact on issues such as
fungibility. Appellate courts do not make factual findings; they review them. See Icicle
Seafoods, Inc. v. Worthington, 475 U.S. 709, 714 (1986) (appellate court may set aside
findings of fact it determines to be clearly erroneous and may reverse incorrect
judgments of law based on proper factual findings, but “it should not simply [make]
factual findings on its own”); Middleton v. Dep’t of Def., 185 F.3d 1374, 1383 (Fed. Cir.
1999) (“as an appellate court, we may not find facts”); First Interstate Bank of Billings v.
United States, 61 F.3d 876, 882 (Fed. Cir. 1995) (“It would be a distortion of our role to
draw conclusions about the facts . . . rather than having the trial court make its own
findings in light of the [legal] standard that we have endorsed.”) (citing Icicle Seafoods,
supra). For purposes of further proceedings in this case, the Commission should regard
the issue of fungibility as an open factual issue for it to resolve.
B
In its final determination, the Commission interpreted Bratsk to require it “to
determine whether non-subject imports would fill the void created by the ‘elimination’ of
subject imports despite the fact that there may be no such void created by an order.”
The Commission criticized that requirement on the ground that it “misconstrues the
purpose of the statute, which is not to bar subject imports from the U.S. market, but is
meant instead to ‘level[] competitive conditions’ by imposing a duty on subject imports
and thus enabling the industry to compete against fairly traded imports.” The
2007-1552 14
Commission added that the Bratsk analysis is contrary to the principle that “under the
statute, it is not required, nor is it permitted, to reach a negative determination based on
the likely effectiveness of an order. . . . The statute contemplates that not all orders will
be effective and does not ask the ITC to perform an additional inquiry to predict the
future effectiveness of import relief.”
In its brief on this appeal, the Commission echoes the same concerns. It argues
that the antidumping statute “does not state that imposition of antidumping or
countervailing duty is appropriate only if the Commission establishes in its injury
determination that such relief will be effective.” The Commission adds that the statute
“recognizes that not all orders will be effective and does not provide for the Commission
to perform an additional inquiry to predict the future effectiveness of import relief.”
Those objections are based on what appears to be a misapprehension of the
purpose of the analysis discussed in Bratsk. The comments reveal that the
Commission views Bratsk as holding that an antidumping duty order may be entered
only if the Commission can determine that the order would be “effective” in the future by
causing the elimination of the subject imports from the market, which imports would not
then be replaced by non-subject imports.
That characterization misses the point of Bratsk. The decision in Bratsk was not
addressed to the potential effectiveness of any possible remedial order. Instead, it was
directed to determining the cause of the injury already suffered by the domestic
industry.
2007-1552 15
An important element of the causation inquiry—not necessarily dispositive, but
important—is whether the subject imports are the “but for” cause of the injury to the
domestic industry. As the Supreme Court has explained,
But for causation is a hypothetical construct. In determining whether a
particular factor was a but-for cause of a given event, we begin by
assuming that that factor was present at the time of the event, and then
ask whether even if that factor had been absent, the event nevertheless
would have transpired in the same way.
Price Waterhouse v. Hopkins, 490 U.S. 228, 240 (1989).
In this context, that principle requires the finder of fact to ask whether conditions
would have been different for the domestic industry in the absence of dumping. Thus,
Bratsk (like Gerald Metals) directs that in cases involving commodity products in which
non-LTFV imported goods are present in the market, the Commission must give
consideration to the issue of “but for” causation by considering whether the domestic
industry would have been better off if the dumped goods had been absent from the
market. That inquiry is not concerned with whether an antidumping order would actually
lead to the elimination of those goods from the market in the future or whether those
goods would be replaced by goods from other sources. Rather, the inquiry is a
hypothetical one that sheds light on whether the injury to the domestic industry can
reasonably be attributed to the subject imports. The focus of the inquiry is on the cause
of injury in the past, not the prospect of effectiveness in the future.
The Commission in its brief argues that the inquiry required by Bratsk is at odds
with the Commission’s obligations under the antidumping laws, but we regard the
inquiry into “but for” causation as a proper part of the Commission’s responsibility to
determine whether the injury to the domestic industry is “by reason of” the subject
2007-1552 16
imports. Moreover, that inquiry is consistent with the characterization of the
Commission’s obligations in the Statement of Administrative Action (“SAA”) that
accompanied the 1994 Uruguay Round Agreements Act. The SAA states that the
Commission must examine all relevant evidence, including any known factors, other
than the dumped or subsidized imports, that may be injuring the domestic industry, and
that the Commission must examine those other factors “to ensure that it is not
attributing injury from other sources to the subject imports.” The Uruguay Round
Agreements Act: Statement of Administrative Action, H.R. Doc. No. 103-316 (Vol. I), at
851-52 (1994), as reprinted in 1994 U.S.C.C.A.N. 4040, 4184-85; see also S. Rep. No.
96-249, at 75 (1979), as reprinted in 1979 U.S.C.C.A.N. 381, 461 (“in examining the
overall injury to a domestic industry, the ITC will consider information which indicates
that harm is caused by factors other than less-than-fair value imports”).
C
In its remand determination, the Commission stated that it interpreted our
decision in Bratsk to require the Commission, when applying the “replacement/benefit”
test, to apply “a presumption in favor of finding replacement” whenever the “triggering
factors” are present, i.e., whenever the antidumping investigation is directed to a
commodity product and price competitive non-subject imports are a significant factor in
the market. The Commission explained that because, as a practical matter, the
Commission and domestic producers “will seldom have information to rebut” that
presumption, the effect of the replacement/benefit test “seems to require the agency to
render a negative determination, if the triggering factors are satisfied, unless the record
contains substantial evidence that either non-subject imports would not replace the
2007-1552 17
subject imports or that such replacement would nonetheless benefit the domestic
industry.”
Applying that approach in light of the record in this case, the Commission first
found that evidence supported the conclusion that non-subject countries and non-
CBERA subject countries had sufficient capacity during the period of investigation to
fully replace the subject imports from Trinidad and Tobago. The Commission then
concluded that although there was no evidence before it as to whether non-Trinidadian
imports actually would have replaced the subject Trinidadian imports, it had to find that
there would have been replacement (and no benefit to the domestic industry) based on
the “presumption in favor of replacement” purportedly required by Bratsk. For that
reason, the Commission felt that it was required to find that the injury to the domestic
industry was not “by reason of” subject imports.
Contrary to the Commission’s interpretation, we do not regard the decision in
Bratsk as requiring the Commission to presume that producers of non-subject goods
would have replaced the subject goods if the subject goods had been removed from the
market. Although we stated there, and reaffirm here, that the Commission has the
responsibility to consider the causal relation between the subject imports and the injury
to the domestic industry, that responsibility does not translate into a presumption of
replacement without benefit to the domestic industry.
In the portion of the Bratsk opinion that the Commission regards as having
created a presumption of replacement, the court was addressing one of the arguments
made by the Commission, namely, that the subject importer had “not demonstrated” that
“non-subject imports were well positioned to completely fill any void left by the
2007-1552 18
withdrawal of subject imports from the market.” 444 F.3d at 1376 (quoting the
Commission’s brief). The court responded to that argument by pointing out that it was
the Commission’s responsibility to make a finding on the issue of causation, and that it
was not the subject importer’s burden to demonstrate that the subject imports did not
cause the injury to the domestic industry. Id. The court’s point was that the
Commission could not acquit its responsibility to address the issue of causation simply
by pointing to the subject importer’s failure to offer evidence to negate causation. See
S. Rep. No. 96-249, at 75 (1979), as reprinted in 1979 U.S.C.C.A.N. 381, 461
(Commission must consider information indicating that harm is caused by factors other
than LTFV imports, but “the petitioner will not be required to bear the burden of proving
the negative.”).
To say that an affirmative determination must be based on evidence that the
injury to the domestic industry is “by reason of” subject imports does not require the
Commission to address the causation issue in any particular way, or to apply a
presumption that non-subject producers would have replaced the subject imports if the
subject imports had been removed from the market. 1 The Commission is simply
1
Mittal acknowledges in its brief that the court in Bratsk “did not create a
rebuttable presumption that if replacement could occur it would occur. Rather, it merely
enforced the Commission’s obligation to satisfy the ‘by reason of’ causation standard
with a reasoned explanation, supported by substantial evidence.” Nonetheless, Mittal
contends that the record contains sufficient evidence to affirm the Commission’s
conclusion that other imports would not have replaced the subject imports from Trinidad
and Tobago during the period of investigation. Whether or not that is the case, the
Commission did not base its determination on a finding with respect to the strength of
the evidence that other imports would not have replaced subject imports, and we
therefore cannot affirm the agency’s decision on that ground. See Sec. & Exch.
Comm’n v. Chenery, 332 U.S. 194, 196 (1947).
2007-1552 19
required to give full consideration to the causation issue and to provide a meaningful
explanation of its conclusions. See Bratsk, 444 F.3d at 1376 (“While there may be
support for the Commission’s ultimate determination of material injury in the record
here, we find that the Commission did not sufficiently explain its decision in this
regard.”).
What Bratsk held is that “where commodity products are at issue and fairly
traded, price competitive, non-subject imports are in the market,” the Commission would
not fulfill its obligation to consider an important aspect of the problem if it failed to
consider whether non-subject or non-LTFV imports would have replaced LTFV subject
imports during the period of investigation without a continuing benefit to the domestic
industry. 444 F.3d at 1369. Under those circumstances, Bratsk requires the
Commission to consider whether replacement of the LTFV subject imports might have
occurred during the period of investigation, and it requires the Commission to provide
an explanation of its conclusion with respect to that factor. The Commission must
further explain whether the record provides support for a finding that the domestic
industry was materially injured “by reason of” the LTFV subject imports after it has
considered the analysis described in Gerald Metals and Bratsk along with the statutorily
mandated factors and any other relevant economic factors that the Commission elects
to consider under section 1677(7)(B)(ii). 444 F.3d at 1373 & n.3. Bratsk did not read
into the antidumping statute a Procrustean formula for determining whether a domestic
injury was “by reason of” subject imports. It simply required the Commission to consider
the “but for” causation analysis in fulfilling its statutory duty to determine whether the
subject imports were a substantial factor in the injury to the domestic industry, as
2007-1552 20
opposed to a merely “incidental, tangential, or trivial” factor. Nippon Steel Group v. Int’l
Trade Comm’n, 345 F.3d 1379, 1381 (Fed. Cir. 2003). 2
We therefore vacate the judgment of the Court of International Trade and remand
with directions for that court to remand the case to the Commission for further
consideration of the material injury issue in light of this opinion.
D
In its decision, the Commission noted that our opinion in Bratsk did not mention
whether replacement of LTFV subject imports by nondumped imports is a factor that
should be considered in threat determinations. Nonetheless, the Commission declined
to issue an affirmative determination as to the threat of material injury to the domestic
industry based on the presumption that nondumped imports would have replaced the
LTFV subject imports from Trinidad and Tobago. Because that analysis was not
required by our decision in Bratsk and our prior decision in this case for the reasons
discussed, we vacate the judgment of the Court of International Trade and remand for
further proceedings with respect to the threat of material injury as well.
In concluding that the Commission committed legal error in the remand
proceedings in this case, we intend no criticism of the Commission’s effort to comply
2
Commissioners Pearson and Okun have noted that interpreting Bratsk in that
manner, i.e., as “a reminder that the Commission, before it makes an affirmative
determination, must satisfy itself that it has not attributed material injury to factors other
than subject imports,” is consistent with the Commission’s obligation to “analyze the
effects of the unfairly traded imports and other relevant factors in a way that enables the
Commission to conclude that it has not attributed the effects of other factors to the
subject imports.” Separate and Additional Views of Chairman Daniel R. Pearson and
Commissioner Deanna Tanner Okun Concerning Bratsk Aluminum v. United States, in
Sodium Hexametaphosphate from China, Inv. No. 731-TA-1110 (Preliminary), USITC
Pub. 3912 (Apr. 2007), at 21.
2007-1552 21
with this court’s previous directions. Indeed, the error we have found flows largely from
the Commission’s effort to proceed with scrupulous attention to the terms of this court’s
remand instructions. The problem may stem from a lack of sufficient clarity in our prior
opinion, which we hope has been rectified in this one.
Each party shall bear its own costs for this appeal.
VACATED and REMANDED.
2007-1552 22