Slip Op. 07-163
UNITED STATES COURT OF INTERNATIONAL TRADE
WIELAND-WERKE AG, PRYMETALL
GmbH & CO. KG, SCHWERMETALL
HALBZEUGWER.K GmbH & CO. KG
and WIELAND METALS, INC.,
Plaintiffs,
v.
UNITED STATES,
Defendant,
and
EAGLE BRASS CO., HEYCO METALS
INC., LUVATA BUFFALO, INC.,
OL]N CORPORATION-BRASS GROUP,
PMX INDUSTRIES, INC., REVERE
COPPER PRODUCTS, INC., and
SCOTT BRASS,
Defendant-]htervenors.
Before: WALLACH, .Tudge
Court No.: 06-00135
PUBLIC VERSION
[Plaintiffs’ Rule 56.2 Moti0n for judgment on the Agency Record is DENIED and the Agency’s
Deterrnination is AFF[RMED.]
Dated: November 7, 2007
Arnold & Porter LLP, (Michael T. Shor and Jonathan S. Batten) for Plaintiffs Wieland-Werke
AG, Prymetall GmbH & Co. KG, Schwennetall Halbzeugwerk GmbH & Co. KG, and Wieland
Metals, lnc.
Charles A. St. Charles, Attorney-Advisor, J ames M. Lyons, General Counsel, Andrea C. Casson,
Assistant General Counse] for Litigation, Office of the General Counsel, U.S. International Trade
Commission, for Defendant United States.
Kelley Dge Collier Shannon, (David A. Hartguist, Jeffrey S. Beckington, and Kathleen W.
Cannon) for Defendant-Intervenors Eagle Brass Co., Heyco Metals, lr1c., Luvata Buffalo, lnc.,
Olin Corporation-Brass Group, PMX Industries, Inc., Revere Copper Products, lnc., and Scott
Brass.
OPINIO,N
Wallach, Judge:
I
INTRODUCTION
Plaintif`fs, Wieland-Werke AG ("Wieland-Werke"), Prymetall GmbH & Co. KG
("Prymetall"), Schwerrnetall I-Ialbzeugwerk GmbH & Co. KG ("Schwennetall"), Gennan
producers and exporters of brass sheet and strip ("BSS"), and Wieland Metals, Inc. (“Wieland
Metals"), a U.S. subsidiary of Wieland-Werke, move for judgment on the agency record,
challenging the final detenniriation of the U.S. international Trade Commission ("ITC" or “the
Commission") in its five-year sunset review of certain antidumping and countervailing duty
orders, as published in Brass Sheet and Stn`p from Brazil Canada,_ France. Genngnv, Italv, and
W, USITC Pub. 3842, lnv. Nos. 70l-TA-269 and 73l-TA-3l 1-314, 3l7, and 379 (Second
Review) (March 2006) G’ublic Version), Final Edited BPI Version of the Cornmission’s Views
(Confidential Version) ("y_igf§"), Defendant’s Appendix, List 2, Doc. l83. P1aintiffs contest,
first, the Commission’s finding that German BSS imports are likely to have a discemible adverse
irnpactl on the domestic BSS industry if the antidumping duty ("AD") order on German imports
l The statute specifically provides that “[t]he Commission shall not cumulatively assess
the volume and effects of imports . . . in a case in which it determines that such imports are likely
to have g discernible adverse impact on the domestic industry." 19 U.S.C. § 1675a(a)(7)
(emphasis added). This opinion will restate the statutory obligation using affirmative language,
were revoked.z Plaintiffs also contest the Commission’s determination that revocation of the
orders in place with respect to the cumulated countries would likely lead to the continuation or
recurrence of material injury to the United States domestic industry within a reasonably
foreseeable time.
The court has jurisdiction pursuant to 28 U.S.C. § l58l(c). The Commission’s findings
are supported by substantial evidence and are otherwise in accordance with law.
II
BACKGROUND
On February l9, 1987, the Commission determined that the BSS industry in the United
States was being materially injured by less than fair value ("LTFV") imports of BSS from
France, Germany, Italy, and Sweden. Certain Brass Sheet and Strip from France, Italyg Sweden,
and West Gennany, USITC Pub. l95l, Inv. Nos. 70l-TA-27O (Final) and 73l-TA-3 13, 314, 316,
and 317 (Final) (February 1987). Commerce subsequently issued AD orders on BSS from
France, Germany, Italy, and Sweden, and a countervailing duty ("CVD") order on BSS from
France. Antidurnning Dutv Order; Brass Sheet a_gc_l Strip From the Federal Republic of Germany,
i.e. that in order for the Commission to permissibly exercise its discretion to cumulatively assess
the volume and effect of imports, it must find that the subject imports are likely to have a
discernible adverse impact on the domestic industry. Rephrasing the statutory terminology in
this fashion simplifies the discussion but does not alter its meaning. § Neenah Foun§y Co. v.
United States, 25 CIT 702, 712, 155 F. Supp. 2d 766 (2001) ("When the lTC considers whether
subject imports are likely to have no discemible adverse impact, the result of the inquiry will be
either negative or affirmative Logic and grainmar indicate that a negative finding is that such
imports will have a discemible adverse impact.”)
2 The Commission is required to make such a finding if it intends to cumulate the subject
imports from various countries for purposes of the material injury analysis. 19 U.S.C. §
l675a(a)(7).
52 Fed. Reg. 6,997 (March 6,41987), as amended by 52 Fed. Reg. 35,750 (September 23, 1987);
§rg.m:_g, 52 Fed. Reg. 6,995 (March 6, 1987); @, 52 Fed. Reg. 6,997 (March 6, 1987), as
amended by 52 Fed. Reg. ll,299 (April 8, 1987); i, 52 Fed. Reg. 6,998 (March 6, 1987).
Countervailing Dutv Order; Brass Sheet and Strip from France, 52 Fed. Reg. 6,996 (March 6,
1987).
The Commission initiated the first sunset review of these orders on Febr'uary l, 1999.3
Brass Sheet and Strip From Brazil and France,' Brass Sheet and Strip From Brazil, Canacla,
France. Italv. Korea. Sweden, Gennanv. Jar)an. and the Netherlands, 64 Fed. Reg. 4,892
(February l, 1999). The Commission determined that revocation of the AD and CVD orders in
place would likely lead to recurrence or continuation of material injury to the domestic industry
within a reasonably foreseeable time. S_ee Brass Sheet and Strip from Brazil Canada, France,
Gennanv, Italy, Korea, the Netherlands, and Sweden, USITC Pub. 3290, Inv. Nos. 70l-TA-268,
270 (Review) and 73l-'l`A-3l7 and 379-380 (Review) (April 2000). German producers did not
participate in the first sunset review.
The Commission initiated this second sunset review of the disputed AD and CVD orders
on March 31, 2005. Brass Sheet and Strip f`rom Brazil, Canada, France, Germanv, Italy, and
@, 70 Fed. Reg. 16,519 (March 31, 2005). The German producers and the domestic BSS
industry participated fully in the review. The Commission decided to conduct a full review of
BSS from Germany based on the receipt of adequate responses from both the domestic and
German respondent interested parties. Brass Sheet and Strip from Brazil, Canada, France,
3 The Commission reviewed AD and CVD orders on BSS from a number of other
countries during this sunset review.
Germarrv. Italv. and .laoan. Explanation of Commission Determinations on Adequacy (July
2005)
The Commission exercised its discretion to cumulate BSS imports from France,
Germany, Italy, and Japan after concluding (l) that revocation of each AD order would likely
have a discemible adverse impact on the domestic BSS industry, _\Li_¢=.yv_s at 14-20, and (2) that the
subject imports were likely to compete with the domestic like product if the AD orders on BSS
imports from those countries were revoked,‘l _i__d_._ at 2()-23. The Commission ultimately
determined that revocation of the orders would likely lead to continuation or recurrence of
material injury to the domestic BSS industry within a reasonably foreseeable time. id at 3l.
Plaintiffs challenge the Commission’s final detennination, as well as certain aspects of the
methodology employed by the Commission to make that determination Plaintiffs’ initial Brief in
Support of their Rule 56.2 Motion for Judgment on the Agency Record ("Plaintiffs’ Motion") at
l-4.
First, Plaintiffs seek to broaden the scope of the "likely" standard pursuant to which the
Commission conducts sunset _reviews. Lc_L at 16; ge 19 U.S.C. § l675a. Plaintiffs contend that
because the "likely" standard requires a probability - and not merely a possibility - that volume,
price effects, and adverse impact will occur and increase, the evidence must show that it is a
"rational economic option” to increase exports in order to support an affirmative determination.
Plaintiffs’ Motion at l6; Plaintiffs’ R.eply Brief in Support of their Rule 56.2 Motion for
4 The Commission found that BSS imports from Brazil faced different conditions of
competition than those from France, Italy, Germany, and Japan; accordingly, BSS from Brazil
was not curnulated for purposes of the material injury analysis. Views at 24. The Commission
found that BSS imports from Canada were not likely to have a discemible adverse impact on the
5
Judgment on the Agency Record (“Plaintiffs’ Reply") at l-2. lt is this contention which
underlies Plaintiffs’ challenges to both the "discemible adverse impact" component of the
Commission’s cumulation analysis and the Commission’s likelihood of material injury analysis.
Plaintiffs’ Motion at l-4; Plaintiffs’ Reply at l-2.
Specifically, Plaintiffs challenge the Commission’s findings that if the orders were
revoked: (l) German producers would have some incentive to increase BSS exports to the United
States; (2) German producers would likely use their unutilized BSS production capacity to
increase BSS exports to the United States; [3) increased BSS exports to the United States are
likely, based on the "export-orientation" of German (and other subj ect) producers; and (4)
German producers would likely sell BSS in the United States at prices significantly below
prevailing U.S. producers’ prices. Plaintiffs’ Motion at l-4. Plaintiffs characterize their
challenge to each of these findings as "relevant to both [the Commission’s] discemible adverse
impact cumulation analysis and its likelihood of material injury analysis." § at l. Plaintiffs
assert that each of these findings are "unlawful" and, on this basis, argue that both the
Commission’s “discemible adverse impact" and ultimate "likelihood of material injury ’
determinations are not supported by substantial evidence. § at 4. Plaintiffs also challenge the
Commission’s "parallel and related findings" with respect to France, Italy, and Japan. § at 3-4.
According to Plaintiffs, "[b]ecause the Commission largely employed the same analysis and
reasoning in its likely adverse impact cumulation analysis and likelihood of injury analysis with
respect to Italy, France, and .Tapan as it did for Gerrnany, such findings and conclusions are
unlawful for the same reasons." lgl_; at 3 l.
domestic BSS industry and, tl1erefore, did not curnulate BSS imports from Canada. I;d.
6 _
III
STANDARD 0F REVIEW
In a sunset review, the court is required to uphold a determination by the Commission
unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance
with law." 19 U.S.C. § l5l6ai(b)(l)(B)(i). A party "challenging the Commission’s determination
under the substantial evidence standard ‘has chosen a course with a high barrier to reversal."’
Nivoon Steel CorD. v. United States, 458 F.3d l345, 1358 (Fed. Cir. 2006) (internal citations
omitted). Substantial evidence is defined as "such relevant evidence as a reasonable mind might
accept as adequate to support a conclusion." Consol. Edison Co. v. N.L.R.B.. 305 U.S. 197, 229,
59 S. Ct. 206, 83 L. Ed. 126 (l938) (citing Appalachian Elec. Power Co. v. N.L.R.B., 93 F.2d
985 (4th Cir. 1938)). There must be "[a] rational connection between the facts found and the
choice made" in an agency determination if it is to be characterized as supported by substantial
evidence and in accordance with law. Burlington Truck Lines, lnc. v. United States, 371 U.S.
156, 168, 83 S. Ct. 239, 9 L. Ed. 2d 207 (1962). The court must not "displace the [agency’s]
choice between two fairly conflicting views, even though the court would justifiably have made a
different choice had the matter been before it de novo." Universal Carnera Corp. v. N.L.R.B.. 340
U.S. 474, 488, 71 S. Ct. 456, 465, 95 L. Ed. 456 (1951). Even when presented with "point[s]
detracting from the substantiality of the evidence," the court will affirm the agency’s
detenninations as long as they are reasonable and supported by the record. Atl. Sugar, Ltd. v.
United States, 744 F.2d l556, 1563 (Fed. Cir. 1984).
In reviewing an agency’s construction of a statute, the court undertakes the two-step
analysis established by the Supreme Court in Chevron U.S.A. lnc. v. Nat. Res. Def. Council
_ln_g, 467 U.S. 837, 842-43, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984). First, the court must
consider "vvhether Congress has directly spoken to the precise question at issue." I;d. at 842. If it
has, the court and the agency "must give effect to the unambiguously expressed intent of
Congress.” Ld. at 843. If, however, Cong:ress has not spoken directly on the issue, the court looks
at whether the agency’s interpretation “is based on a permissible construction of the statute." ig
The agency’s construction need not be the only reasonable interpretation or even the most
reasonable interpretation Zenith Radio Corp. v. United States, 437 U.S. 443, 450, 98 S. Ct.
2441, 57 L. Ed. 2d 337 (1978). The court must defer to the agency’s reasonable interpretation of
a statute even if the court might have preferred another. L