SCM Corp. v. United States, Court No. 77-4-00553.

• Decision Date: 01 July 1981
• Docket Number: Court No. 77-4-00553.
• Citation: 2 CIT 1,519 F. Supp. 911
• Parties: SCM CORPORATION, Plaintiff, v. UNITED STATES, Defendant, Brother International Corporation, Party-in-Interest.
• Court: U.S. Court of International Trade

519 F. Supp. 911

2 CIT 1

SCM CORPORATION, Plaintiff, v. UNITED STATES, Defendant Brother International Corporation, Party-in-Interest.

Court No. 77-4-00553.

United States Court of International Trade.

July 1, 1981.

Frederick L. Ikenson, Washington, D. C., for plaintiff SCM Corp.

Stuart E. Schiffer, Acting Asst. Atty. Gen., Dept. of Justice, Civil Division, Commercial Litigation Branch, Washington, D. C., David M. Cohen, Director, Commercial Litigation Branch; (Sheila N. Ziff, New York City, on briefs), for defendant United States.

Tanaka, Walders & Ritger, Washington, D. C. (H. William Tanaka, Lawrence R. Walders and Wesley K. Caine, Washington, D. C., on briefs), for party-in-interest Brother International Corp.

MEMORANDUM AND ORDER

NEWMAN, Judge:

Plaintiff ("SCM") — a domestic portable typewriter manufacturer — challenges, pursuant to 19 U.S.C. § 1516(c) (1976), the negative antidumping injury determination made on June 19, 1975 by the United States International Trade Commission ("Commission") in the case of Portable Electric Typewriters From Japan, U.S.I.T.C. Public 732, Investigation No. AA1921-145 (40 FR 27079 (1975)). Brother International Corporation ("Brother")—an importer of portable electric typewriters ("PETs") from Japan and the consignee of New York, N.Y. Consumption Entry No. 77-302804, the immediate subject of the instant action — appears as the party-in-interest pursuant to 19 U.S.C. § 1516(f).

Presently before me are: plaintiff's motion for judgment directing the Secretary of Commerce to publish a finding of dumping covering PETs from Japan; defendant's cross-motions, in the alternative, to dismiss on the ground of mootness, to stay the instant proceedings pending final disposition of the issues involved in Nakajima All Co., Ltd. v. United States, Court No. 80-6-00933, and Silver Reed America, Inc. v. United States, Court No. 80-6-00934, or to remand the instant proceedings to the Commission for reconsideration of its negative injury determination upon the basis of the record in the instant matter supplemented by the record in Portable Electric Typewriters From Japan, Investigation No. 731-TA-12, 45 FR 30186 (1980), a subsequent injury investigation involving PETs from Japan wherein the Commission made an affirmative determination; and also a cross-motion of the party-in-interest for summary judgment (which is a renewal of a prior cross-motion).¹

I.

The pertinent history of this litigation follows:²

In its Investigation No. AA1921-145, the Commission determined, by a three to two vote with one abstention, that an industry in the United States is not being or likely to be injured or prevented from being established by reason of PETs from Japan sold at less than fair value ("LTFV") within the meaning of the Antidumping Act, as amended (19 U.S.C. § 160 et seq. (1970 & Supp. V 1975).³

Although the imported articles found to be sold at LTFV by Treasury⁴ and covered by the Commission's notice of investigation were PETs, for purposes of identifying "what is the industry most likely to be affected" by the imported articles, the majority considered, alternatively, the facilities devoted to the production of all portable typewriters (both electric and manual) or the facilities devoted to the production only of PETs. The majority found that in either instance the affected domestic industry was SCM, the sole United States producer of portable typewriters, both electric and manual.

While acknowledging that imports of PETs from Japan sold at LTFV had obtained a significant share of the United States market for portable typewriters during the period of the Treasury Investigation (October 1973 through March 1974), the majority concluded that "imports penetration alone is not an adequate basis for determining injury" (40 FR 27080). Chairman Leonard considered "that import penetration indicates injury only when it is established that the penetration is at the expense of the domestic industry and causes lost sales" (40 FR 27080, fn.2) (Emphasis added). Implicitly, therefore, Chairman Leonard found there were no lost sales. However, the majority's Statement of Reasons reveals no specific finding concerning lost sales. The dissenting Commissioners, on the other hand, found that SCM "has clearly lost a considerable share of the market and consequently lost considerable sales" (40 FR 27081) (emphasis added).

The majority further found that, other than market penetration, none of the tests of injury applied in this case showed that an industry in the United States is being or is likely to be injured. The other tests indicated that the domestic industry had prospered, and was likely to continue to grow and expand notwithstanding the fact that it did not produce certain types of low end PETs.

In February 1979, plaintiff filed a motion for summary judgment contending that several aspects of the Commission's negative injury determination were erroneous as a matter of law, and that an affirmative injury determination should have been made. Thereupon, defendant and the party-in-interest filed cross-motions for summary judgment.

On March 7, 1980 Chief Judge Re issued an opinion, finding certain deficiencies in the majority's Statement of Reasons for the determination under review. SCM Corporation v. United States (Brother International Corporation, Party-in-Interest), 84 Cust.Ct. ___, C.R.D. 80-2, 487 F.Supp. 96 (1980). Chief Judge Re stated, inter alia:

Congress has not only directed the ITC to state its determinations but has also required the agency to explain those determinations. The statutory requirements of "a statement of reasons," imposed by the 1958 amendments to the Antidumping Act, and the "complete statement of findings and conclusions" imposed by the Trade Act of 1974, are clearly consistent with applicable decisional law. For the ITC these requirements are specifically mandated by the pertinent statutory provisions.

The ITC determination in this case nominally includes the majority's "Statement of Reasons." In substance, however, the statements are really mixed conclusions of ultimate facts and statutory interpretation, rather than reasons. The ITC has stated the conclusions which presumably are the result of its reasoning, but it has neither supplied nor articulated the reasons which support those conclusions.

An illustration is the conclusion that significant market penetration alone is not an adequate basis for determining injury. This is a major policy determination with broad and significant implications in the interpretation and administration of the antidumping law. Clearly, Congress intended the ITC to develop and refine the very general concept of injury as it is applied to individual cases. This responsibility is not adequately discharged in a case in which the ITC determination is neither clearer nor more specific than the statutory language itself.

When the ITC fails to delineate and make explicit the basis for the conclusions, by articulating a rational connection between the facts found and the discretionary action taken, the court cannot decide, as it must, whether the ITC has exercised a reasoned discretion consistent with legislative intent.

In order for the court to perform its function of judicial review, this proceeding is stayed, and the ITC will be afforded an additional opportunity to supply this court with the reasons supporting its conclusions * * *. 487 F.Supp. at 108. Emphasis added.

Thus, the Court in essence did not grant or deny the motion or cross-motions for summary judgment. Rather, such motions were held in abeyance and the following direction was issued:

it is ordered that this proceeding be stayed for such necessary time, not to exceed 90 days, as the ITC may require to supply the court with a more specific and explicit statement of reasons for the conclusions that: (1) The affected "industry" was limited to, alternatively, the facilities devoted to the production of all portable typewriters, or, the production of portable electric typewriters; and (2) significant market penetration by less than fair value imports alone is not an adequate basis for determining injury. id.

II.

While this action was pending, plaintiff filed a petition on April 9, 1979 for the initiation of a second antidumping proceeding covering PETs from Japan containing updated information. Subsequently, on March 18, 1980 the Secretary of Commerce issued an affirmative determination of sales at LTFV in that proceeding (45 FR 18416 (1980)); on May 7, 1980 the Commission announced an affirmative injury determination in the case of Portable Electric Typewriters From Japan, U.S.I.T.C. Public 1062, Investigation No. 731-TA-12, 45 FR 30186 (1980); and on May 9, 1980 the Secretary of Commerce published an antidumping duty order (45 FR 30618 (1980)).

III.

Consequently, we are faced with the following scenario:

In its first PET investigation, the Commission on June 19, 1975 made a negative injury determination;

On March 7, 1980 Chief Judge Re remanded this action to the Commission to "supply the Court with a more specific and explicit statement of reasons";

On May 7, 1980 in its second PET investigation (relative to the second petition) the Commission announced an affirmative injury determination, and an antidumping order followed on May 9, 1980;

On June 5, 1980 defendant moved to dismiss the instant action on the ground that it was rendered moot by the antidumping duty order issued on May 9, 1980. Alternatively, defendant moved for an extension of time within which the Commission could comply with the remand order in C.R.D. 80-2;

On July 10, 1980 plaintiff filed a memorandum in opposition to defendant's motion to dismiss, arguing that the case was not moot for two reasons: (a) the new antidumping duty order on which defendant's mootness argument was based had been challenged in this Court by Japanese import-export interests, and as long as that order or any subsidiary...