Allegheny Ludlum Corp. v. U.S., SLIP OP. 00-109.

• Decision Date: 28 August 2000
• Docket Number: No. 99-06-00361.,SLIP OP. 00-109.,99-06-00361.
• Citation: 116 F.Supp.2d 1276
• Parties: ALLEGHENY LUDLUM CORP., et al., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

116 F.Supp.2d 1276

ALLEGHENY LUDLUM CORP., et al., Plaintiffs, v. UNITED STATES, Defendant.

SLIP OP. 00-109.

No. 99-06-00361.

United States Court of International Trade.

August 28, 2000.

COPYRIGHT MATERIAL OMITTED

Collier Shannon Scott, PLLC, Washington, DC (David A. Hartquist, Paul C. Rosenthal, Kathleen W. Cannon, R. Alan Luberda and John M. Herrmann), for Plaintiffs.

Lyn M. Schlitt, General Counsel; James A. Toupin, Deputy General Counsel; U.S. International Trade Commission, Office of the General Counsel, (Shara L. Aranoff), for Defendant.

OPINION

WALLACH, Judge.

I INTRODUCTION

This case is before the court upon Plaintiffs' Rule 56.2 Motion For Judgment Upon The Agency Record, challenging the decision of the U.S. International Trade Commission ("ITC" or "Commission") in Certain Stainless Steel Plate From Belgium, Canada, Italy, Korea, South Africa, and Taiwan, Inv. Nos. 701-TA-376, 377, and 379 (Final) and 731-TA-788-793 (Final), USITC Pub. 3188 (May 1999), 64 Fed.Reg. 25,515 (May 12, 1999) ("Final Determination"). Plaintiffs challenge two aspects of the Final Determination: (1) the ITC's decision that cold-rolled stainless steel coiled plate comprises a "domestic like product" distinct from hot-rolled stainless steel coiled plate; and (2) the ITC's determination that the U.S. cold-rolled stainless steel plate industry was not materially injured by imports of stainless steel cold-rolled plate from Belgium and Canada. For the reasons stated below, the court affirms the Commission's determination.

II BACKGROUND

In response to a petition filed by affected U.S. industry, on May 28, 1998, the ITC published in the Federal Register a notice of its preliminary determination that there was "a reasonable indication" that a U.S. industry was materially injured by reason of dumped or subsidized imports of stainless steel plate in coils from Belgium, Canada, Italy, Korea, South Africa, and Taiwan. Certain Stainless Steel Plate From Belgium, Canada, Italy, Korea, South Africa, and Taiwan, 63 Fed.Reg. 29251 (1998). Following subsequent findings by the International Trade Administration of the U.S. Department of Commerce ("Commerce") that such stainless steel plate was, in fact, being subsidized and/or sold at less than fair value (i.e., "dumped") in the U.S. market, the ITC commenced the final determination that is the subject of Plaintiffs' challenge.¹

Two aspects of the Final Determination are relevant. First, the majority of commissioners² found that two domestic like products corresponded to the imported merchandise (certain stainless steel plate in coils) that Commerce identified as being dumped and subsidized: certain hot-rolled stainless steel plate in coils ("hot-rolled plate") and certain cold-rolled stainless steel plate in coils ("cold-rolled plate"). Final Determination at 7.³ In reaching its determination, the ITC noted, inter alia, that cold and hot-rolled plate have "limited interchangeability and different end uses," that cold-rolling involves "substantial additional processing steps," that producers and consumers see hot and cold-rolled plate as separate products, and that prices for cold-rolled plate are generally higher. Id. Because it found hot and cold-rolled plate to be distinct products, the ITC separately investigated whether each of the domestic industries producing these products had been materially injured by subject imports of corresponding merchandise. See id. at 8.

The second relevant aspect of the Final Determination concerns the ITC's finding that the U.S. industry producing cold-rolled plate was not materially injured by imports of cold-rolled plate from Belgium and Canada.⁴ Although the ITC observed that cumulated imports of subject cold-rolled plate from these countries had declining average unit values and controlled a large share of the U.S. market, it nevertheless found little interest by domestic producers in selling cold-rolled plate and no indication that such imports had depressed domestic cold-rolled plate prices. Id. at 23-24. For these and other reasons, the ITC concluded that the domestic industry producing cold-rolled plate was "not materially injured by reason of cumulated subject imports of cold-rolled plate from Belgium and Canada." Id. at 25.⁵

III ANALYSIS

A STANDARD OF REVIEW

In reviewing the Final Determination, the court "shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i) (1994). Substantial evidence is something more than a "mere scintilla," and must be enough evidence to reasonably support a conclusion. Primary Steel, Inc. v. United States, 17 CIT 1080, 1085, 834 F.Supp. 1374, 1380 (1993); Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F.Supp. 961, 966 (1986), aff'd, 810 F.2d 1137 (Fed.Cir.1987). "As long as the agency's methodology and procedures are reasonable means of effectuating the statutory purpose, and there is substantial evidence in the record supporting the agency's conclusions, the court will not impose its own views as to the sufficiency of the agency's investigation or question the agency's methodology." Ceramica Regiomontana, S.A., 10 CIT at 404-5, 636 F.Supp. at 966.

B

THE ITC'S LIKE PRODUCT DETERMINATION IS IN ACCORDANCE WITH LAW AND SUPPORTED BY SUBSTANTIAL RECORD EVIDENCE.

To make an injury determination, the ITC first defines one or more domestic like products that correspond to the dumped or subsidized imports identified by Commerce and, in turn, identifies the industry or industries producing these like products. 19 U.S.C. § 1671d(b) (countervailing duties); 19 U.S.C. § 1673d(b) (1994) (dumped merchandise); see Timken Co. v. United States, 20 CIT 76, 79, 913 F.Supp. 580, 584 ("[I]n determining whether an industry in the United States is materially injured or threatened with material injury by reason of the subject imports, the Commission must first define the `like product' in order to determine the relevant `industry.'"). A "domestic like product" is defined as "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) (1994). The relevant "industry," in turn, is defined as the "producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major proportion of the total domestic production of the product." 19 U.S.C. § 1677(4)(A) (1994).

As noted above, in the Final Determination the ITC found that two domestic like products, cold-rolled and hot-rolled plate, correspond to the subject merchandise found by Commerce to be subsidized or dumped into the U.S. market.⁶ Plaintiffs advance both legal and factual arguments for why this determination was not in accordance with law or otherwise supported by substantial record evidence. For the reasons set forth below, the court affirms this aspect of the Final Determination.

The Commission Did Not Err in Finding Sufficient Domestic Production to Initiate a Like-Product Analysis for Cold-Rolled Plate.

Plaintiffs first challenge the like product determination by arguing that the ITC's decision to treat cold-rolled plate as a separate like product is inconsistent with 19 U.S.C. § 1677(7)(C) (1994), which requires the ITC to analyze the volume and price effects of the subject imports, as well as their impact on the production, capacity, sales, profits, employment and investments of the relevant industry. According to Plaintiffs, in order to meaningfully perform such an analysis, "the alleged domestic industry [for purposes 19 U.S.C. § 1677(4)(A)] must necessarily have more than a de minimis level of domestic production of the product." Plaintiffs' Reply Brief ("Plaintiffs' Reply" or "Reply") at 2. Here, Plaintiffs claim, "the record evidence indicates de minimis production and sales of the subject cold-rolled plate"—a result which, they argue, should have led the ITC to conclude that no domestic cold-rolled plate industry existed. Id.

The Final Determination shows two bases for the ITC's finding that there was sufficient domestic production to initiate a like-product investigation for cold-rolled plate. First, the majority of commissioners, after noting that cold-rolled plate "was produced for commercial sale and in response to customer orders ... during every year of the period of investigation,"⁷ provided a "compare" citation to, inter alia, its investigation in Extruded Rubber Thread from Malaysia, Inv. No. 753-TA-34, USITC Pub. 3112 (June 1998) ("Extruded Rubber"). Final Determination at 5 & n.18. In Extruded Rubber, the ITC found that food-grade extruded rubber thread did not constitute a separate domestic like product from other extruded rubber thread ("ERT"), since only small, non-commercial quantities of food-grade ERT had been produced in recent years. Second, and in a concurring footnote,⁸ Commissioner Crawford noted her view that "it is the fact of production—not the amount—that determines whether there is domestic production.... Here, admittedly there is actual domestic production of cold-rolled plate." Final Determination at 5-6 n.19 (citing Commissioner Crawford's dissenting views from Extruded Rubber).

19 U.S.C. § 1677(7)(C) provides the basic guidelines the ITC must follow in evaluating whether subject imports have materially injured, threatened with material injury, or materially retarded the establishment of a U.S. industry. Nothing in this or any other statute defines a minimum "size" or "amount" of domestic production.⁹ Nor do Plaintiffs' arguments persuade the court that an effective application of § 1677(7)(C) requires a specific level of domestic production. While in some instances a dearth of production data may inhibit the ITC's analysis, in others a low level of domestic production may provide a discrete set of data that...