Taiwan Semiconductor Industry Ass'n v. U.S.

• Decision Date: 30 June 1999
• Docket Number: Slip Op. 99-57.,Court No. 98-05-01460.
• Citation: 59 F.Supp.2d 1324
• Parties: TAIWAN SEMICONDUCTOR INDUSTRY ASSOCIATION, et al., Plaintiffs, and Motorola, Inc., Plaintiff-Intervenor, v. UNITED STATES, Defendant, and Micron Technology, Inc. Defendant-Intervenor.
• Court: U.S. Court of International Trade

59 F.Supp.2d 1324

TAIWAN SEMICONDUCTOR INDUSTRY ASSOCIATION, et al., Plaintiffs and Motorola, Inc., Plaintiff-Intervenor, v. UNITED STATES, Defendant and Micron Technology, Inc. Defendant-Intervenor.

Slip Op. 99-57.

Court No. 98-05-01460.

United States Court of International Trade.

June 30, 1999.

White & Case, LLP (Christopher F. Corr, Richard G. King, and Amy E. Farrell), Washington, DC, for Plaintiffs.

Covington & Burling (Harvey M. Applebaum), Washington, DC, for Plaintiff-Intervenor.

Lyn M. Schlitt, General Counsel, James A. Toupin, Deputy General Counsel, Michael Diehl, Office of the General Counsel, U.S. International Trade Commission, Washington, DC, for Defendant.

Hale and Dorr LLP (Gilbert B. Kaplan, Michael D. Esch, Paul W. Jameson, and Cris R. Revaz), Washington, DC, for Defendant-Intervenor.

OPINION

POGUE, Judge.

This action is before the Court on Plaintiffs' motion for judgment on the agency record pursuant to USCIT Rule 56.2. Taiwan Semiconductor Industry Association; Taiwan Semiconductor Manufacturing Company, Ltd.; Winbond Electronics Corporation; Alliance Semiconductor Corporation; Galvantech, Inc.; and Integrated Silicon Solution, Inc. (collectively, "Plaintiffs") seek review of the final determination of the U.S. International Trade Commission ("Commission") in Static Random Access Memory Semiconductors from the Republic of Korea and Taiwan, Inv. Nos. 731-TA-761 & 762 (Final) (List 2, Doc. 395) (Apr. 9, 1998) ("Final Determination").¹ Specifically, Plaintiffs challenge the Commission's determination that the industry in the United States producing static random access memory semiconductors ("SRAMs") is materially injured by reason of imports from Taiwan that are sold at less than fair value ("LTFV"). The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (1994).

Background

SRAMs are integrated circuits containing thousands or millions of cells that allow data to be stored and retrieved at high speeds. Unlike dynamic random access memory semiconductors ("DRAMs"), SRAMs are capable of retaining their information without the need for periodic electrical "refresh," and therefore, they generally consume less power than DRAMs. Moreover, SRAMs are more complex in design than DRAMs and are more difficult to manufacture. SRAMs come in a variety of sizes, process technologies, classifications, designs, and access speeds, and have two basic uses, serving as: 1) main memory in such products as hand-held cellular phones, portable computers, fax copiers, and modems, and 2) intermediate — or "cache" — memory in computer systems.

On February 25, 1997, Micron Technology filed a petition with the Commission and the Department of Commerce alleging that an industry in the United States was materially injured or threatened with material injury by reason of LTFV SRAMs imported from Korea and Taiwan. The Department of Commerce found that the Korean and Taiwanese SRAMs were being sold in the United States at LTFV. See Static Random Access Memory Semiconductors From the Republic of Korea, 63 Fed.Reg. 8,934 (Dep't Commerce, Feb. 23, 1998) (final determ.); Static Random Access Memory Semiconductors From Taiwan, 63 Fed.Reg. 8,909, 8,910 (Dep't Commerce, Feb. 23, 1998) (final determ.). Thereafter, the Commission made a negative material injury determination concerning the Korean imports and an affirmative material injury determination regarding the Taiwanese imports. See Final Determination at 3.

Only two commissioners participated in the final injury determination regarding SRAMs from Taiwan. See Final Determination at 33, n. 168. Vice-Chairman Lynn M. Bragg found that the U.S. industry was materially injured by LTFV imports of SRAMs from Taiwan, with Chairman Marcia E. Miller dissenting. Vice-Chairman Bragg's decision was deemed to be an affirmative determination of the Commission pursuant to section 771(11) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677(11)(1994). Thus, hereafter, the Court will simply refer to Vice-Chairman Bragg's decision as the Commission's determination.

In sum, the Commission found that a price collapse caused material injury to the U.S. SRAM industry, and that "the subject imports from Taiwan contributed to and exacerbated the price collapse to a significant degree[.]" Final Determination at 37.

Standard of Review

In reviewing the Commission's determination, the Court must sustain a final determination 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)(1994).

Discussion

A. Material Injury "By Reason of" LTFV Imports

The statute directs the Commission to "make a final determination of whether ... an industry in the United States ... is materially injured ... by reason of [the subject] imports[.]" 19 U.S.C. § 1673d(b)(1994). In Gerald Metals, Inc. v. United States, 132 F.3d 716 (Fed.Cir. 1997), the Court of Appeals for the Federal Circuit ("Federal Circuit") held that the "by reason of" standard "mandates a showing of causal — not merely temporal — connection between the [subject imports] and the material injury." 132 F.3d at 720. The standard "requires adequate evidence to show that the harm occurred `by reason of' the [subject] imports, not by reason of a minimal or tangential contribution to material harm...." Id. at 722.

In examining the causal nexus between the subject imports and the material injury, the Commission is required by 19 U.S.C. § 1677(7)(B) to consider three factors: "1) the volume of [the subject] imports, 2) the effect of [the subject] imports on prices of like domestic products, and 3) the impact of [the subject] imports on domestic producers of like products." USX Corp. v. United States, 11 CIT 82, 84, 655 F.Supp. 487, 489 (1987).²

The Commission evaluates the volume and price effects of the subject imports and their consequent impact on the domestic industry by applying the standards set forth in 19 U.S.C. § 1677(7)(C).³ See U.S. Steel Group v. United States, 96 F.3d 1352, 1360 (Fed.Cir.1996); see also Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Antidumping) at Art. 3.1 ("Antidumping Agreement") ("A determination of injury ... shall ... involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products.").

More specifically, the statute directs the Commission to evaluate: 1) whether the volume of the subject imports is significant; 2) whether price underselling by the subject imports is significant and whether domestic price depression or suppression caused by the subject imports is significant; and 3) the impact on the domestic industry. See 19 U.S.C. § 1677(7)(C). In assessing the third factor, impact, the Commission evaluates the bearing of the volume and price effects on the domestic industry, see, e.g., Timken Co. v. United States, 20 CIT 76, 89, 913 F.Supp. 580, 591 (1996), and routinely determines whether the adverse impact is significant as well. See, e.g., Angus Chemical Co. v. United States, 140 F.3d 1478, 1482 (Fed.Cir.1998).

Thus, after assessing whether the volume, price effects, and impact of the subject imports on the domestic industry are significant,⁴ the statutory "by reason of" language implicitly requires the Commission to "determine whether these factors as a whole indicate that the [subject] imports themselves made a material contribution to the injury." Gerald Metals, Inc. v. United States, 22 CIT ___, ___ 27 F.Supp.2d 1351, 1355 (1998), appeal dismissed for appellant's failure to prosecute in accordance with Federal Circuit Rule 31(a), No. 99-1166 (Fed.Cir. Apr. 16, 1999);⁵ cf. U.S. Steel Group v. United States, 18 CIT 1190, 1211-12, 873 F.Supp. 673, 694 (1994) (declining to extend the causation test propagated by the court in British Steel Corp. v. United States, 8 C.I.T. 86, 593 F.Supp. 405 (1984), which held that "[t]he statute's causation prerequisite to an affirmative determination is satisfied if the ... imports contribute, even minimally, to the conditions of the domestic industry[.]" 8 CIT at 96, 593 F.Supp. at 413), aff'd, 96 F.3d 1352 (Fed. Cir.1996). But see Grupo Industrial Camesa v. United States, 18 CIT 461, 465, 853 F.Supp. 440, 444 (1994) (relying on British Steel's minimal contribution test), aff'd, 85 F.3d 1577 (Fed.Cir.1996); Pasco Terminals, Inc. v. United States, 83 Cust. Ct. 65, 88, 477 F.Supp. 201, 220-21 (1979) (holding that it was sufficient that the subject imports "contributed to the general depression of prices and to market disruption"), aff'd, 68 C.C.P.A. 8, 634 F.2d 610 (Cust & Pat.App.1980).⁶

"Therefore, proper adherence to the causation analysis incorporated in the statute prevents the Commission from finding material injury by reason of [the subject] imports where their contribution to the overall harm is de minimis (e.g., minimal or tangential)." Gerald Metals, 22 CIT at ___, 27 F.Supp.2d at 1356.⁷

Although in Gerald Metals this Court specifically interpreted the statute as it existed prior to the enactment of the Uruguay Round Agreements Act ("URAA") on January 1, 1995, this Court has deemed that the "by reason of" standard articulated therein is applicable to the amended statute. See NEC Corp. v. Dep't of Commerce, 22 CIT ___, ___, 36 F.Supp.2d 380, 391-93 (1998); Goss Graphics System, Inc. v. United States, 22 CIT ___, ___, 33 F.Supp.2d 1082, 1089-90 (1998), appeal docketed, No. 99-1150 (Fed.Cir. Dec. 11, 1998). The URAA did not change the relevant statutory language, and the Statement of Administrative Action to the URAA expressly states that the causation analysis under the old statute is consistent with the URAA. See SAA at 851. Therefore, the "by reason of" standard applies under the URAA.

Moreover, the plain language of the SAA is consistent with ...