155 F.Supp.2d 750 (CIT. 2001), 98-09-02847, Titanium Metals Corp. v. United States

Docket Nº:Court No. 98-09-02847.
Citation:155 F.Supp.2d 750
Party Name:TITANIUM METALS CORPORATION, Plaintiffs, v. THE UNITED STATES, Defendant, and Zaporozhye Titanium & Magnesium Combine, the Ministry of Industrial Policy of the Government of Ukraine, Avisma Titanium-Magnesium Works, RMI Titanium Company, UST-Kamenogorsk Titanium and Magnesium Plant, Specialty Metals Company, TMC Trading International, Ltd., and TMC
Case Date:June 22, 2001
Court:Court of International Trade
 
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Page 750

155 F.Supp.2d 750 (CIT. 2001)

TITANIUM METALS CORPORATION, Plaintiffs,

v.

THE UNITED STATES, Defendant,

and

Zaporozhye Titanium & Magnesium Combine, the Ministry of Industrial Policy of the Government of Ukraine, Avisma Titanium-Magnesium Works, RMI Titanium Company, UST-Kamenogorsk Titanium and Magnesium Plant, Specialty Metals Company, TMC Trading International, Ltd., and TMC USA, Inc., Defendant-Intervenors.

Slip Op. 01-75.

Court No. 98-09-02847.

United States Court of International Trade.

June 22, 2001

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diKieffer & Horgan, Washington, DC (J. Kevin Horgan), Donald E. diKieffer, for Plaintiff Titanium Metal Corporation.

Lyn M. Schlitt, General Counsel, James A. Toupin, Deputy General Counsel, (Robin L. Turner), Office of the General Counsel, U.S. International Trade Commission, Washington, DC, for Defendant.

Aitken Irvin Lewin Berlin Vrooman & Cohn, Washington, DC (Bruce Aitken,

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Kieran Sharpe), for Defendant-Intervenors Zaporozhye Titanium and Magnesium Combine and the Ministry of Industrial Policy of Ukraine.

Wilmer, Cutler & Pickering, Washington, DC (John D. Greenwald), Leonard Shambon, for Defendant-Intervenors Avisma Titanium-Magnesium Works and RMI Titanium Company.

Squire, Sanders & Dempsey, L.L.P., Washington, DC (Ritchie T. Thomas), Heidi Duncan, for Defendant-Intervenors Ust-Kamenogorsk Titanium and Magnesium Plant and Specialty Metals Company.

LeBoeuf, Lamb, Greene & MacRae, Washington, DC (Melvin S. Schwechter), William C. Sjoberg, for Defendant-Intervenor TMC Trading International, Ltd. and TMC USA, Inc.

OPINION

BARZILAY, Judge.

I. INTRODUCTION

Plaintiff, Titanium Metals Corp., ("TIMET") is one of two companies that produce titanium sponge in the United States. TIMET is an integrated producer of titanium products, including titanium sponge, ingots and mill products for use in aerospace, industrial and consumer products. TIMET challenges the United States International Trade Commission's ("ITC" or "Commission") determination to revoke the antidumping duty orders on titanium sponge from Japan, Kazakhstan, Russia and Ukraine pursuant to 751(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675(b)(1994). 1 The ITC's determination to revoke the antidumping duty order was based on the Commission's finding that circumstances have changed such that revocation of the orders would not likely lead to continuation or recurrence of material injury to a domestic industry in the United States within a reasonably foreseeable time. TIMET asserts that the Commission's determination is wrong and requests a remand for further investigation. The court exercises jurisdiction pursuant to 28 U.S.C. § 1581(c)(1994). 2

II. BACKGROUND

This litigation concerns the antidumping duty orders issued against Kazakhstan, Russia, Ukraine and Japan. In 1968, the Department of the Treasury, whose duties and functions were transferred to the United States Department of Commerce ("Commerce") in 1980, found that titanium sponge from the U.S.S.R. was being sold at less than fair value ("LTFV") and was causing material injury to the domestic titanium sponge industry. See Titanium Sponge from the U.S.S.R., 33 Fed.Reg. 12138 (August 28, 1968). In 1992, following the breakup of the former Soviet Union, Commerce adjusted the antidumping finding and issued 15 separate antidumping duty orders covering the independent states, all of which were subsequently revoked except those against Kazakhstan, Russia and Ukraine. In 1984, the ITC determined that the domestic titanium industry was threatened with material injury due to LTFV imports of titanium sponge from Japan, and Commerce issued an antidumping duty order covering these imports from two companies, Toho Titanium ("Toho") and Osaka Titanium, now doing business as Sumitomo Sitix. See Antidumping Duty Order: Titanium Sponge

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from Japan, 49 Fed.Reg. 47053 (Nov. 30, 1984) . This order was subsequently revoked as to Sumitomo Sitix; the antidumping duty order therefore applied only to Toho.

On December 9, 1997, TMC Trading International Ltd. and TMC USA, Inc. (collectively "TMC") filed a petition under 19 U.S.C. § 1675(b), asking that the antidumping duty order against Russia be revoked due to changed circumstances. See Titanium Sponge from Japan, Kazakhstan, Russia and Ukraine, 62 Fed.Reg. 68300 (Dec. 31, 1997). As a result, the ITC initiated a changed circumstances review as to titanium sponge from Russia, and self-initiated changed circumstances reviews of the antidumping orders on Japan, Kazakhstan, and Ukraine. See Titanium Sponge from Japan, Kazakhstan, Russia and Ukraine, 63 Fed.Reg. 13873 (March 23, 1998).

Section 751 of the Tariff Act of 1930, codified at 19 U.S.C. § 1675(b)(2), provides that in a changed circumstances review the ITC shall "determine whether revocation of the order or finding is likely to lead to a continuation or recurrence of material injury...." In making this determination, the Commission "shall consider the likely volume, price effect, and impact of imports of the subject merchandise on the industry if the order is revoked or the suspended investigation is terminated." 19 U.S.C. § 1675a(a)(1). The Commission is required to take into account

(A) its prior injury determinations, including the volume, price effect, and impact of imports of the subject merchandise on the industry before the order was issued or the suspension agreement was accepted,

(B) whether any improvement in the state of the industry is related to the order or the suspension agreement, (and)

(C) whether the industry is vulnerable to material injury if the order is revoked or the suspension agreement is terminated ....

Id.

By a vote of 3-0, the ITC determined that revocation of the antidumping duty orders was not likely to lead to continuation or recurrence of material injury to the domestic titanium sponge industry. See Titanium Sponge from Japan,, Kazakhstan, Russia and Ukraine, USITC Pub. 3119, Inv. Nos. 751-TA-17-20 (August 1998) (" Determination "). 3 All three Commissioners comprising the Commission at the time found the like product to be titanium sponge and defined the domestic industry as the domestic producers of titanium sponge. Under 19 U.S.C. § 1675a(a)(7), the Commission has the discretion to determine whether to cumulate imports if certain circumstances are met in a changed circumstances review, but is not permitted to cumulate imports likely to have no discernible adverse impact on the domestic industry. The Commission majority found that as there were [ ] from Ukraine during the period of investigation ("POI"), and as there was little likelihood of significant Ukraine production and little likelihood of any Ukrainian titanium sponge being imported into the United States, Ukrainian imports were likely to have no discernible adverse impact on the domestic industry. 4 Hence,

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the Commission elected not to cumulate Ukraine imports. 5

In its determination, the Commission found several relevant conditions of competition. First, the ITC found that worldwide and domestic titanium sponge capacity had declined significantly. See Determination at 17. Another condition of competition was a lack of open market sales. See id. at 18. Additionally, the Commission found that United States demand for titanium sponge was derived from demand for downstream titanium metal products produced from titanium sponge. See id. at 19. "The composition of demand for titanium mill products has shifted significantly from the military aerospace segment to the commercial aerospace and non-aerospace segment since the prior titanium sponge investigations," indicating greater stability in the titanium sponge market. Id. at 20. The Commission further found that a substantial increase in long-term supply contracts for titanium sponge and titanium mill products protected the domestic industry from demand swings and was likely to protect domestic sponge producers in the future. See id. at 22-23. Moreover, "[a]pparent U.S. consumption ... more than doubled from 1995 to 1997," and the ITC found that "demand [was] likely to remain strong in the foreseeable future." Id. at 21. Finally, the Commission noted that while the substantial number of TIB imports were not themselves considered subject imports, they were considered a partial indicator of the potential increase in the volume of titanium sponge that would be exported to the U.S. in the future were the antidumping duty orders to be revoked. See id. at 23-24.

The Commission "evaluat[ed] the likely volume of imports of subject merchandise if the orders under review [were] revoked, finding that the combined cumulated subject imports and TIB imports from subject sources were unlikely to increase substantially if the orders were revoked". Id. at 25, 27. The ITC predicted that the domestic titanium sponge producers would continue to account for a significant share of the imports of titanium sponge due to long term supply contracts to import or purchase titanium sponge from subject sources. 6 Regarding the likely price effects of subject imports, the Commission found that because the domestic industry sold only about [ ] of its total production from 1995 to 1997 on the open market, any changes in prices of imported product would have little direct effect on the prices of the domestic like product or

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impact on the domestic industry. See id. at 30.

The Commission did not find that the record supported a conclusion that the domestic industry was threatened with material injury. See id. at 32. As the Commission stated,

Virtually all domestic industry performance indicators increased from 1995 to 1997. Production steadily increased from 1995 to 1997. Capacity utilization followed a similar pattern...

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