Jeannette Sheet Glass Corp. v. United States, Court No. 83-5-00729.

• Decision Date: 22 March 1985
• Docket Number: Court No. 83-5-00729.
• Citation: 607 F. Supp. 123
• Parties: JEANNETTE SHEET GLASS CORPORATION, Plaintiff, v. UNITED STATES, Defendant, and Crystal International Corporation, and Flachglas A.G., Intervenors, Glaverbel, S.A., Intervenor, Erie Scientific Company, A Division of Sybron Corporation, and Erie-Electroverre, S.A., A Wholly Owned Subsidiary of Sybron Corporation, Intervenors.
• Court: U.S. Court of International Trade

607 F. Supp. 123

JEANNETTE SHEET GLASS CORPORATION, Plaintiff, v. UNITED STATES, Defendant and Crystal International Corporation, and Flachglas A.G., Intervenors Glaverbel, S.A., Intervenor, Erie Scientific Company, A Division of Sybron Corporation, and Erie-Electroverre, S.A., A Wholly Owned Subsidiary of Sybron Corporation, Intervenors.

Court No. 83-5-00729.

United States Court of International Trade.

March 22, 1985.

COPYRIGHT MATERIAL OMITTED

Stewart & Stewart, Washington, D.C., Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr. and Charles A. St. Charles, Sp. Counsel, Washington, D.C., for plaintiff.

Michael P. Mabile, Acting General Counsel and Catherine R. Field, Office of General Counsel, United States International Trade Commission, Washington, D.C., for defendant.

Mudge Rose Guthrie Alexander & Ferdon, Washington, D.C. (N. David Palmeter, David P. Houlihan, Washington, D.C., and Alan H. Price, of counsel), for intervenors Crystal International Corporation and Flachglas A.G.

Ulmer, Berne, Laronge, Glickman & Curtis, Cleveland, Ohio (Morton L. Stone and

Ronald H. Isroff, Cleveland, Ohio, of counsel), for intervenor Glaverbel, S.A.

Hodgson, Russ, Andrews, Woods & Goodyear, Buffalo, N.Y. (Victor T. Fuzak, Anthony L. Dutton and Craig M. Indyke, Buffalo, N.Y., of counsel), for intervenors Erie Scientific Company and Erie-Electroverre, S.A.

Max N. Berry, Washington, D.C. (Marsha A. Echols, Washington, D.C., of counsel), for amicus curiae Donnelly Corporation.

BERNARD NEWMAN, Senior Judge:

Introduction

By this action, plaintiff challenges the preliminary negative determinations of the International Trade Commission ("Commission") issued in antidumping investigations pursuant to 19 U.S.C. § 1673b(a). In the preliminary determinations under review the Commission found there was no "reasonable indication" that plaintiff, Jeannette Sheet Glass Corporation ("plaintiff" or "Jeannette"), the sole domestic producer of thin sheet glass, is materially injured or threatened with material injury by reason of imported "regular quality" thin sheet glass from Switzerland, Belgium or the Federal Republic of Germany; and that plaintiff is not materially retarded in the establishment of a "high quality" thin sheet glass industry by reason of imports of such glass from Belgium or the Federal Republic of Germany. Thin Sheet Glass from Switzerland, Belgium and the Federal Republic of Germany, Inv. Nos. 731-TA-127, 128 and 129 (Preliminary), USITC Pub. No. 1376 (May 1983). In view of the negative determinations, the antidumping investigations were terminated and notice of such termination was published on May 11, 1983 (48 Fed.Reg. 21213 (1983)).

Plaintiff seeks review of the Commission's preliminary determinations upon the agency's record pursuant to Rule 56.1 of the rules of the Court, and presents basically three contentions:

1) The Commission's determinations are not in accordance with the "reasonable indication" standard as articulated in Republic Steel Corp. v. United States, 8 CIT ___, 591 F.Supp. 640 (July 11, 1984), reh'g denied, 9 CIT ___, Slip Op. 85-27 (March 11, 1985).

2) The determinations with respect to regular quality thin sheet glass are arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law.

3) The determinations respecting material retardation of the establishment of a domestic high quality thin sheet glass industry are arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law.

For the reasons that follow the case is remanded to the Commission for reconsideration of its preliminary negative determinations as to material injury or the threat of material injury to an industry in the United States producing regular quality thin sheet glass in compliance with the standard of review articulated in Republic Steel Corp., supra. The Commission's preliminary negative determinations respecting material retardation of the establishment of a high quality thin sheet glass industry in the United States are affirmed.

Background

On March 16, 1983 Jeannette filed a petition with the Commission and the Department of Commerce alleging that imports of thin sheet glass from Switzerland, Belgium and the Federal Republic of Germany are being sold in the United States at less than fair value ("LTFV"), and that as a result the domestic industry producing thin sheet glass (viz., Jeannette) is materially injured or threatened with material injury. The petition distinguished between the "regular quality" thin sheet glass that Jeannette produced, used primarily in the production of microscope slides, cosmetic mirrors, and lantern slides for slide projectors, and "high quality" thin sheet glass, used primarily as optical coating glass for instrumentation having light emitting diodes or liquid crystal display, and for photographic slide glass. On April 6, 1983 Jeannette amended its petition to allege that LTFV imports of high quality thin sheet glass from Belgium and the Federal Republic of Germany are retarding the establishment of a high quality thin sheet glass industry in the United States.

On April 27, 1983, after conducting its preliminary investigations, the Commission (Chairman Alfred Eckes and Commissioner Veronica A. Haggart; Commissioner Paula Stern dissenting in part) determined that there is no reasonable indication that the domestic regular quality thin sheet glass industry (viz., Jeannette) is materially injured or threatened with material injury by reason of imports of regular quality thin sheet glass from Switzerland, Belgium or the Federal Republic of Germany, allegedly sold at LTFV. Additionally, the Commission unanimously found there is no reasonable indication that the establishment of a high quality thin sheet glass industry in the United States is being materially retarded by reason of imports of high quality thin sheet glass from Belgium or the Federal Republic of Germany, allegedly sold at LTFV.¹ Material retardation was not alleged concerning Switzerland because that country does not export high quality thin sheet glass to the United States.

Jeannette commenced this action on May 17, 1983 challenging the Commission's negative determinations. Pursuant to Rule 56.1(a) of the Rules of the Court, Jeannette filed on May 29, 1984, a motion for an order directing that this matter be submitted for review upon the agency record. On July 17, 1984, this Court granted Jeannette's motion. Thereafter on August 7, 1984, Jeannette filed the present motion together with a supporting memorandum; and on August 15, 1984 the Commission moved for a stay of this action pending a decision on a motion for reconsideration to be filed in Republic Steel, supra, or a decision on appeal in that case.

On October 4, 1984, the Commission filed a motion for reconsideration in Republic Steel of that portion of Judge Watson's decision relating to the "reasonable indication" standard applicable to the Commission's preliminary investigations. Plaintiffs in Republic Steel also requested reconsideration of the issue of cumulation. The Commission's motion for a stay of the present proceeding was denied by this Court on October 2, 1984. The Commission's motion for reconsideration in Republic Steel was denied by Judge Watson on March 11, 1985. 9 CIT ___, Slip Op. 85-27.

Following the submission of briefs on plaintiff's motion for review in the present case, oral argument was heard on January 17, 1985.

Commission's Determination that there is No Reasonable Indication of Material Injury or Threat of Material Injury to the Regular Thin Sheet Glass Industry

We first review the Commission's preliminary determinations respecting material injury or threat of material injury to the regular quality thin sheet glass industry.

Commission's findings

Jeannette, wholly owned by its employees and managers, began producing thin sheet glass in March 1980 when it reopened a plant formerly owned by ASG, Inc. and Fourco Glass Co., which was shut down in November 1978. The former employees of ASG provided capital, and with government guarantees and additional funds from private lenders, purchased the plant and refurbished it.

The Commission also found:

1. Throughout the period of investigation, production of regular quality thin sheet glass was profitable and the profits remained comparatively stable.

2. Domestic production, shipments and capacity utilization rose from 1980 to 1981, but then declined from 1981 to 1982.

3. Employment remained stable and hours worked increased from 1980 to 1981, but both factors declined from 1981 to 1982.

4. Inventories of regular quality thin sheet glass increased throughout the period under investigation.

In determining whether the "difficulties" experienced by the domestic industry were caused by the alleged LTFV imports, the Commission considered, among other things, underselling by the imports, lost sales, and price suppression resulting in lost revenues. In instances where there was underselling by the imports, the majority Commissioners found the margin of underselling "minimal". Lost sales and revenues were attributed to the lower quality of the domestic product, and the majority found that price was not a determinative factor.

Pertaining to threat of material injury, the Commission majority found in the negative on the basis of the limited productive capacity or high levels of capacity utilization of the exporters (Erie-Electroverre of Switzerland; Glaverbel of Belgian; and Flachglas, the West German firm). The Commission majority also noted the absence of plans by the exporters to expand shipments to the United States.

Dissenting Commissioner Stern's views

Commissioner Stern found that Jeannette is currently experiencing economic difficulties with respect to the regular quality thin sheet glass product, as did the majority commissioners. Specifically, Commissioner Stern pointed to the evidence of record that domestic...