Goss Graphics Systems v. U.S.

Decision Date20 June 2000
Docket NumberBAUER-ALBERT,KBA-MOTTER
Citation216 F.3d 1357
Parties(Fed. Cir. 2000) GOSS GRAPHICS SYSTEMS, INC., Plaintiff, v. UNITED STATES, Defendant. MITSUBISHI HEAVY INDUSTRIES, LTD., Plaintiff-Appellant, and MAN ROLAND DRUCKMASCHINEN AG and MAN ROLAND INC., Plaintiffs-Appellants, andCORPORATION and KOENIG &AG, Plaintiffs-Appellants, and TOKYO KIKAI SEISAKUSHO, LTD., Plaintiff, v. UNITED STATES, Defendant-Appellee, and GOSS GRAPHICS SYSTEMS, INC. Defendant-Appellee. 99-1150, 99-1151, 99-1152
CourtU.S. Court of Appeals — Federal Circuit

Richard O. Cunningham, Steptoe & Johnson LLP, of Washington, DC, argued for plaintiff-appellant, Mitsubishi Heavy Industries, Ltd. With him as counsel on the brief were Edward J. Krauland and Maury D. Shenk. Of counsel was Veronica Moran Wetherill.

Michael J. Chapman, Shearman & Sterling, of Washington, DC, argued for plaintiffs-appellants, MAN Roland Druckmaschinen AG and MAN Roland Inc. With him on the brief were Thomas B. Wilner, and Jeffrey M. Winton.

Kenneth George Weigel and Laura Fraedrich, Kirkland & Ellis, of Washington, DC, of counsel on the brief for plaintiffs-appellants, KBA-Motter Corporation and Koenig & Bauer-Albert AG.

Neal J. Reynolds, Attorney, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, argued for defendant-appellee, United States. With him on the brief were Lyn M. Schlitt, General Counsel; and James A. Toupin, Deputy General Counsel.

Charles Owen Verrill, Jr., Wiley, Rein & Fielding, of Washington, DC, argued for defendant-appellee, Goss Graphics Systems, Inc. With him on the brief were Alan H. Price, and Timothy C. Brightbill. Of counsel were John R. Shane, and Eileen P. Bradner.

Before LOURIE, RADER, and BRYSON, Circuit Judges.

RADER, Circuit Judge.

The International Trade Commission (ITC) determined that imminent foreign imports of large newspaper printing presses (LNPPs) sold at less than fair value (LTFV) posed a threat of material injury to a domestic industry. See Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, From Germany and Japan, USITC Pub. 2988, 52, Inv. Nos. 731-TA-736 and 737 (Aug. 1996) (Final Determination). To make this determination, the ITC cumulated imports from Japan and Germany. See id. at 37. The Court of International Trade affirmed the ITC's final determination on cumulation and threat of material injury. See Goss Graphics Sys., Inc. v. United States, 33 F. Supp. 2d 1082, 1104 (Ct. Int'l Trade 1998). Because the ITC properly determined that Japanese and German imports overlapped, justifying cumulation, and the ITC did not commit legal error in determining that there was a threat of material injury to a domestic industry, this court affirms the judgment of the Court of International Trade in its entirety.

BACKGROUND

LNPPs are highly sophisticated presses designed to print major newspapers. In operation, LNPPs produce tens of thousands of newspapers per hour. Newspaper companies order LNPPs to meet their individual specifications, which vary significantly. Contracts on LNPPs stretch over many months and specify terms of sale, delivery, design, construction, and installation. See Goss Graphics, 33 F. Supp. 2d at 1085. Under these circumstances, LNPPs "offered in different bid processes to different purchasers are not easily comparable to one another." Final Determination at 40.

The appellee, Goss Graphics Systems, Inc. (Goss), is the largest supplier of LNPPs in the U.S. market. See id. at 10, 23. Goss represents the domestic industry in this case. The appellants are Japanese and German LNPP producers including Mitsubishi Heavy Industries, Ltd., MAN Roland Druckmaschinen AG and MAN Roland Inc., and KBA-Motter Corporation and Koenig & Bauer-Albert AG. Ltd. (collectively, foreign producers).

The substantial cost and life expectancy of LNPPs contribute to a relatively small number of U.S. sales in a given year. See id. at 19. Beginning in 1992, the worldwide LNPP market experienced a dramatic decline. See International Trade Comm'n Staff Report, VI-7 (Aug. 6, 1996). In 1994, however, the worldwide LNPP market began "to demonstrate renewed strength following the[] worst recession in 50 years." Id. In June 1995, the domestic industry filed an antidumping petition against imports of LNPPs sold in the United States at LTFV by the foreign producers (hereinafter subject imports).

The ITC investigated whether the subject imports materially injured or posed a threat of material injury to the domestic industry1 under 19 U.S.C. 1677(7)(F) (1994). During the investigation, the ITC examined a six-year period from 1991 to 1996 "to better assess conditions in the LNPP market and the nature of competition in that market." Final Determination at 19. As a threshold matter, the ITC cumulated imports from Japan and Germany in analyzing material injury and threat of material injury. See id. at 37, 47. According to the statute, "the Commission may cumulatively assess the volume and price effects of imports of the subject merchandise from all countries . . . if such imports compete with each other and with domestic like products in the United States market." 19 U.S.C. 1677(7)(G)(i) (H) (1994). In particular, the ITC determined that a "reasonable overlap" existed between the Japanese imports and German imports because they compete with each other and with domestic products in the U.S. market. See Final Determination at 32.

Based on the investigation of cumulated imports, the ITC concluded that the subject imports did not materially injure the domestic industry.2 See id. at 46. In its analysis, the ITC noted: "the subject imports are having some adverse impact on the industry . . . [but] the full impact of the[] lost sales and market share is not yet fully reflected in the financial condition of the industry . . . . [Thus,] we conclude the adverse effect of the subject imports has not reached the level necessary for us to find material injury by reason of such imports." Id. at 45.

However, the ITC held that foreign imports pose a threat of material injury under 19 U.S.C. 1677(7)(F).3 See id. at 47. Specifically, the ITC found that the subject imports satisfied the statutory requirement that "further dumped or subsidized imports are imminent and [that] material injury by reason of imports would occur unless an order is issued." See id. at 46. The full text of 1677(7)(F)(ii) states:

Basis for determination. The Commission shall consider the factors set forth in clause (i) as a whole in making a determination of whether further dumped or subsidized imports are imminent and whether material injury by reason of imports would occur unless an order is issued or a suspension agreement is accepted under this subtitle. The presence or absence of any factor which the Commission is required to consider under clause (i) shall not necessarily give decisive guidance with respect to the determination. Such a determination may not be made on the basis of mere conjecture or supposition.

In applying this statutory section, the ITC weighed the vulnerability of the domestic industry as an important factor. See id. at 48. For example, the ITC stated that the "small number of pending sales . . . will likely result in intense competition among domestic and foreign suppliers for bid awards." Id. at 50. The intensified competition, the ITC continued, would lead to price suppression, see id., and "significantly hamper the industry's ability to develop the advanced technologies necessary to stay competitive in [the LNPP] market," id. at 51. After considering the relevant statutory factors, the ITC found the subject imports posed a threat of material injury.

Foreign producers appealed the ITC's affirmative determination of threat of material injury to the Court of International Trade. The Court of International Trade affirmed the ITC's Final Determination in its entirety. See Goss Graphics, 33 F. Supp. 2d at 1104. Foreign producers appeal the cumulation determination and the affirmative finding of threat of material injury. Neither party appeals the determination of no material injury.

DISCUSSION

This court reviews ITC's factual determinations by reapplying the Court of International Trade's standard of review. See Micron Tech., Inc. v. United States, 117 F.3d 1386, 1393 (Fed. Cir. 1997). Thus, as the Court of International Trade earlier examined, this court inquires whether the ITC's determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. 1516a(b)(1)(B)(i) (1994); see Suramerica de Aleaciones Laminadas v. United States, 44 F.3d 978, 983 (Fed. Cir. 1994). In the present case, this court first addresses the cumulation issue, then turns to the threat of material injury determination.

I.

In injury determinations, 19 U.S.C. 1677(7)(G)(i) and (H) govern when the ITC "may cumulatively assess the volume and price effects of imports of the subject merchandise from all countries" for petitions filed on the same day. The statute permits the ITC to cumulate imports "if such imports compete with each other and with domestic like products in the United States market." 19 U.S.C. 1677(7)(G)(i), (H). The ITC's inquiry for a sufficient overlap of competition used a listing of ways to detect overlapping competition outlined in Fundicao Tupy, S.A. v. United States, 12 C.I.T. 6, 678 F. Supp. 898, 902 (Ct. Int'l Trade 1988), aff'd, 859 F.2d 915 (Fed. Cir. 1988). These ways include "the fungibility and similar quality of the imports, the similar channels of distribution, the similar time period involved, and the geographic overlap of the markets." 678 F. Supp. at 902. This court acknowledges that these ways help detect overlapping competition, though other ways may apply in future cases.

At the outset, the ITC noted that the "price competition in [the LNPP] market . . . occurs...

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