Caribbean Ispat Ltd. v. U.S., Court No. 02-00756.

CourtU.S. Court of International Trade
Citation366 F.Supp.2d 1300
Docket NumberCourt No. 02-00756.,Slip Op. 05-37.
PartiesCARIBBEAN ISPAT LIMITED, Plaintiff, v. UNITED STATES, Defendant.
Decision Date22 March 2005

Steptoe & Johnson LLP (Mark A. Moran, Matthew S. Yeo and Evangeline D. Keenan), Washington, DC, for plaintiff.

Lyn M. Schlitt, General Counsel, James M. Lyons, Deputy General Counsel, and Irene H. Chen, U.S. International Trade Commission, for defendant.

Collier Shannon Scott, PLLC (Paul C. Rosenthal, R. Alan Luberda and Kathleen W. Cannon), Washington, DC, for intervenor-defendants Georgetown Steel Company, LLC et al.

Opinion & Order

AQUILINO, Senior Judge.

The above-encaptioned plaintiff producer of steel in the Republic of Trinidad and Tobago ("RTT"), which apparently has recently changed its corporate name to Mittal Steel Point Lisas Limited, pleads for relief from that part of the final determination of the U.S. International Trade Commission ("ITC") sub nom. Carbon and Certain Alloy Steel Wire Rod From Brazil, Canada, Germany, Indonesia, Mexico, Moldova, Trinidad and Tobago, and Ukraine, 67 Fed.Reg. 66,662 (Nov. 1, 2002), which concluded that the domestic U.S. industry is materially injured by reason of its exports found to have been sold here at less than fair value. Its complaint is that that determination is not supported by substantial evidence on the record and the commissioners voting in the affirmative did not perform the proper "by reason of" analysis that 19 U.S.C. § 1673d(b)(1) requires. Whereupon the plaintiff prays that this court remand the matter to the Commission to

reconsider and explain fully whether the volume of imports from Trinidad and Tobago was significant, had significant price effects, and had a significant adverse impact during the period of investigation in light of other known and potential causes of injury, in particular, the effects of other subject and non-subject imports,1 and to provide an adequate explanation as to how it ensured that it did not attribute the effects of other subject and non-subject imports to imports from [RTT];

to quote from the proposed form of order accompanying its motion for judgment upon the agency record that has been interposed2 pursuant to USCIT Rule 56.2.

The court's jurisdiction to decide this motion is based upon 19 U.S.C. § 1516a(a)(2)(A)(i)(II) and 28 U.S.C. §§ 1581(c), 2631(c). And, whatever the issues raised, defendant's determination must be affirmed unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law". 19 U.S.C. § 1516a(b)(1)(B)(i).

I

The imports from RTT were subjected to separate material-injury analysis, as mandated by an exception to the ITC cumulation requirement. That is, per 19 U.S.C. § 1677(7)(G)(i)(I) when petitions are filed on the same day, the Commission is required to assess cumulatively the volume and effect of the subject merchandise from all countries, except that

from any country designated as a beneficiary country under the Caribbean Basin Economic Recovery Act (19 U.S.C. 2701 et seq.) for purposes of making a determination with respect to that country[.]

19 U.S.C. § 1677(7)(G)(ii)(III). This exception applies to Trinidad and Tobago3 herein and underlies plaintiff's complaint. See, e.g., Connecticut Steel Corp. v. United States, 852 F.Supp. 1061, 18 CIT 313, 314 and 852 F.Supp. 1061, 1063 n. 1 (1994) (affirming ITC negative preliminary determination with respect to RTT); Certain Steel[] Wire Rod From Canada, Germany, Trinidad and Tobago, and Venezuela, 63 Fed.Reg. 14,475 (March 25, 1998) (negative final determination with regard to RTT); Certain Steel Wire Rod From Canada, Germany, Trinidad and Tobago, and Venezuela, 62 Fed.Reg. 63,958 (Dec. 3 1997) (negative final determination as to RTT).

According to the plaintiff, only the ITC chairman under-took to determine whether imports from RTT "by themselves" caused material injury, considering the much-larger volumes of lower-priced subject and non-subject imports into the domestic market during the period of investigation:

... Her analysis, which fully accounted for the critical volume and pricing evidence ..., led her to dissent from the Commission Majority's affirmative determination on the grounds that imports from [RTT] did not make a material contribution to the domestic industry's injured condition.

Plaintiff's Opening Brief, p. 11. Further:

Chairman Okun's dissenting opinion is significant for purposes of this appeal not for the ultimate conclusion she reached, but rather because it demonstrates the type of analysis that must be undertaken to ensure compliance with the legal obligation that injury from other sources not be attributed to imports from Trinidad and Tobago.

Id. at 23. Indeed, her ITC colleagues do not disagree with her stated premise that, because RTT

is a beneficiary country under ... CBERA[], imports from Trinidad and Tobago may only be cumulated with imports from another CBERA country for purposes of determining material injury, or threat thereof, by reason of imports from the CBERA beneficiary country or countries. [RTT] is the only subject country in these investigations that is a CBERA country. Therefore, my analysis of whether the domestic industry is materially injured or threatened with material injury by reason of wire rod from [RTT] is limited to a consideration of subject imports from [there] alone.4

Rather, their views of the causation factors disagree. With regard to volume, they note that, throughout the period of investigation, RTT was the second or third largest source of subject wire rod imports into the U.S. market, and find, in that "price sensitive market", RTT's

absolute volume levels and market share, and their increase from 1999 to 2001, to be significant in absolute terms and relative to production and consumption in the United States.5

As for price,

subject imports from [RTT] are concentrated in the low to medium carbon industrial quality wire rod category, commodity products that are highly price sensitive. Subject imports from Trinidad are highly substitutable with the domestic product in that category, which reinforces the price competition between subject imports from [RTT] and the domestic product.

Subject imports from [RTT] undersold comparable U.S. products in 70.8 percent of quarterly comparisons from 1999 to 2001. For Products 1 and 2, both of which were grades of industrial quality wire rod, subject imports from [RTT] undersold the domestic industry in 22 out of 26 comparisons by margins that ranged up to 11.0 percent. The highest quantity of available price comparisons between imports from [RTT] and the domestic product were for Products 1 and 2. Eight purchasers rated the U.S. product inferior (higher) in price to [RTT] subject imports ..., and only one purchaser ranked the domestic product superior (lower) in price to subject imports from [RTT]. In light of the importance of price in purchasing decisions, and the significant and increasing volume of subject imports from Trinidad and Tobago from 1999 to 2001, we find the underselling indicated by the pricing data, and corroborated by the other information in the record, to be significant.

We find that subject imports from Trinidad and Tobago have had significant adverse price suppressing effects. Pricing pressure from the readily available and increasing volume of lower-priced subject imports from [RTT] prevented the domestic industry from raising prices when its costs increased, particularly in the price-sensitive low carbon industrial quality wire rod category. As stated earlier, [RTT] subject imports ... are concentrated in that category. The cost-price squeeze experienced by the domestic industry described above was exacerbated by its declining shipments and consequent declining revenues, particularly during 2001, as lower-priced imports from [RTT] increased in volume by 23.5 percent and gained market share at the expense of the domestic industry.

We therefore find that there has been significant price underselling by subject imports from Trinidad and Tobago of the domestic product, and that subject imports have suppressed prices of domestically produced wire rod to a significant degree.6

Finally, regarding the impact of RTT volume and price, the Commission majority view is as follows:

... [D]uring the investigation period, the domestic industry experienced growing operating losses, decreased production, shipments, capacity and capacity utilization, declining employment indicators, increasing costs, and suppressed prices. Trinidad and Tobago, which was ranked as the second or third most significant subject import supplier throughout the period, shipped increasing volumes of subject imports that undersold the domestic wire rod in a majority of comparable periods. Thus, based on the significant and increasing volume and market share of subject imports from [RTT] in a declining market, the significant price underselling, and significant price suppression by these imports, and declining industry indicators from 1999 to 2001, we find that the subject imports from Trinidad and Tobago are having a significant adverse impact on the domestic industry producing wire rod.7

A

The core of the controversy is the jurisprudence interpreting the causation requisite of 19 U.S.C. § 1673d(b)(1). According to that section, an affirmative injury determination has two elements, the first being that a domestic industry is materially injured, and the second that it be "by reason of" the imports under investigation. See, e.g., Gerald Metals, Inc. v. United States, 132 F.3d 716, 719-20 (Fed.Cir.1997). In order to make such findings, commissioners must determine whether factors listed in 19 U.S.C. § 1677(7)(B)(i) are significant, and, if so, decide whether overall they indicate that the subject imports are causing material injury to the domestic industry. See 19 U.S.C. § 1677(7)(C).

The Court of Appeals for the Federal...

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