Atlantic Sugar, Ltd. v. United States, Court No. 80-5-00754.

• Decision Date: 14 December 1982
• Docket Number: Court No. 80-5-00754.
• Citation: 4 CIT 248,553 F. Supp. 1055
• Parties: ATLANTIC SUGAR, LTD., and Redpath Sugars, Ltd., Plaintiffs, v. UNITED STATES, Defendant, and Amstar Corporation, Party-in-Interest.
• Court: U.S. Court of International Trade

553 F. Supp. 1055

4 CIT 248

ATLANTIC SUGAR, LTD., and Redpath Sugars, Ltd., Plaintiffs, v. UNITED STATES, Defendant and Amstar Corporation, Party-in-Interest.

Court No. 80-5-00754.

United States Court of International Trade.

December 14, 1982.

COPYRIGHT MATERIAL OMITTED

Rogers & Wells, New York City (Robert V. McIntyre and George C. Smith, New York City, on brief), for plaintiffs.

J. Paul McGrath, Asst. Atty. Gen., Washington, D.C. (David M. Cohen, Director, Commercial Litigation Branch, Francis J. Sailer, Commercial Litigation Branch, Washington, D.C., on brief), for defendant.

Sullivan & Cromwell and Baker & McKenzie, New York City, for party-in-interest.

MEMORANDUM AND ORDER

WATSON, Judge:

Plaintiffs, Atlantic Sugar, Ltd. and Redpath Sugars, Ltd., challenge (under section 516A(a)(2) of the Tariff Act of 1930 (19 U.S.C. § 1516a(a)(2))) a final determination made by the International Trade Commission (ITC) in an antidumping investigation. The ITC found that the importation of refined sugar from Canada, sold at less than fair value from October 1, 1978 through March 31, 1979 was causing material injury to an industry in the United States.¹

The parties have cross-moved for judgment on the administrative record under Rule 56.1. Due to miscalculations in the data underlying some of the ITC findings, the Court remanded the matter to the ITC for reconsideration.² In the resulting affirmation of its earlier determination of injury, the ITC found that, even with the corrected data, the aggregate profits for the domestic producers continued to decline.³

The Court then rejected the ITC's aggregation method as an inappropriate approach to finding that injury was experienced by "the producers of all, or almost all, of the production within that market," as required by section 771(4)(C) of the Tariff Act of 1930 (19 U.S.C. § 1677(4)(C)). The matter was remanded to the ITC with orders that the Commission "determine whether the Revere Sugar Corporation suffered injury within the meaning of this statute and if not, whether there is any reason to conclude that those who were injured are the producers of all or almost all the production in the region."⁴ This resulted again in a determination of injury⁵ which is now before the Court for review.

In examining the ITC's most recent determination of material injury, the Court concludes that the finding of injury to Revere was not made in accordance with the law and must therefore be held unlawful under section 516A(b)(1)(B) of the Tariff Act (19 U.S.C. § 1516a(b)(1)(B)).

The ITC based its determination that Revere was injured upon an evaluation of data that was not confined to Revere's operations within the eleven state Northeast regional limitation of this investigation.⁶ Specifically, the Commission found injury to Revere based on data indicating declines in: 1) production; 2) capacity utilization; 3) sales to customers in the region; 4) person hours worked; 5) worker productivity; 6) profits; as well as 7) consistent underselling by the Canadian producers.⁷

Factors one through six of the above were based on information that included Revere's Chicago plant, located outside the regional boundaries of the investigation.

The regional industry provision, and therefore an investigation of material injury to a regional industry, is limited to producers "within such market who sell all or almost all of their production of the like product in question in that market." Section 771(4)(C) of the Tariff Act of 1930, (19 U.S.C. § 1677(4)(C)).

Since it has already been determined that a regional industry in a separate and isolated market, with specified boundaries does exist,⁸ the ITC may not now ignore those boundaries when evaluating evidence for the purpose of determining whether the same regional industry has been materially injured. The proscription against use of data from elsewhere is necessary to insure that the regional industry found to exist at an earlier juncture is actually the subject of the later material injury investigation.

Here, the Chicago plant is one of only three plants operated by Revere.⁹ Moreover, production at this plant was of sufficient quantity to potentially render inaccurate or otherwise confuse the evaluation of the effect of Canadian sugar imports upon Revere's operations in the Northeast region.

The Commission also erred in failing to take into account information in the record regarding data for Revere from the years 1976 and 1977. While analysis of injury to the other regional producers was based on their performance over the five-year period of 1975 to 1979, the ITC confined its investigation of injury to Revere to information covering only two years—1978 and 1979, with an explanation that the data in the record concerning injury to Revere was limited to this period.¹⁰ Revere officials reported that data for operations prior to acquisition by Revere on December 14, 1977 was not available to them and probably was still being held by Revere's predecessor in interest, Ingredient Technology Corporation.

Notwithstanding these facts, information regarding Revere's sales and profits for 1976 and part of 1977 was available, and indeed was part of the record.¹¹ This additional information could be important to a complete and accurate analysis of the effect of Canadian imports upon Revere.

The fact that this information was not obtained directly from Revere does not lessen the Commission's statutory obligation to use the "best information available" when a party or any other person refuses or is "unable" to provide the requested data. 19 U.S.C. § 1677e(b); Budd Co., Railway Division v. United States, 1 CIT 67, 507 F.Supp. 997 (USCIT 1980). Clearly, as in this case, where the information is available and has been made part of the record, the Commission must consider the information, and if it chooses to disregard the data in its evaluation, it must explain its reasons.

The Court finds no lack of substantial evidence or lack of conformity to the law in the other findings to which plaintiffs object. Plaintiffs claim that Revere's agreement with the Philippine Exchange Company, Inc. (Philex) guaranteed Revere a profit, and that consequently Canadian imports could have no material effect on Revere's profitability.

The Court's view is that the Commission could reasonably find that "it is not at all clear that Revere was guaranteed a profit by the terms of the agreement," as was stated in Revere's auditor's report. Further, this Court has already noted that no single factor, including profitability, is conclusive or decisive in a material injury determination.¹²

Plaintiffs have not persuaded the Court that the failure of Revere to supply information for the period prior to its acquisition of the plants gives rise to an inference that the evidence is unfavorable to it. The "adverse inference rule" should not apply in the case of Revere, inasmuch as this rule has vitality only "when a party has relevant evidence within his control which he fails to produce." International Union (UAW) v. N.L.R.B., 459 F.2d 1329, 1336 (D.C.Cir.1972). It is undisputed that Revere did not have that information.

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