Papierfabrik August Koehler Ag v. U.S.

• Decision Date: 17 November 2009
• Docket Number: Court No. 08-00430.,Slip Op. 09-132.
• Citation: 675 F.Supp.2d 1172
• Parties: PAPIERFABRIK AUGUST KOEHLER AG and Koehler America, Inc., Plaintiffs, and Mitsubishi International Corporation, Mitsubishi HiTech Paper Flensburg GmbH, and Mitsubishi HiTech Paper Bielefeld GmbH, Plaintiff-Intervenors, v. UNITED STATES and the United States International Trade Commission, Defendants, and Appleton Papers Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

675 F.Supp.2d 1172

PAPIERFABRIK AUGUST KOEHLER AG and Koehler America, Inc., Plaintiffs, and Mitsubishi International Corporation, Mitsubishi HiTech Paper Flensburg GmbH, and Mitsubishi HiTech Paper Bielefeld GmbH, Plaintiff-Intervenors, v. UNITED STATES and the United States International Trade Commission, Defendants, and Appleton Papers Inc., Defendant-Intervenor.

Slip Op. 09-132.

Court No. 08-00430.

United States Court of International Trade.

November 17, 2009.

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Hunton & Williams LLP, Washington, DC (Richard P. Ferrin and William Silverman), for Plaintiffs.

Steptoe & Johnson LLP, Washington, DC (Jamie B. Beaber and Eric C. Emerson), for Plaintiff-Intervenors.

James M. Lyons, General Counsel, Neal J. Reynolds, Assistant General Counsel for Litigation, Office of the General Counsel, U.S. International Trade Commission (Marc A. Bernstein), for Defendant U.S. International Trade Commission.

King & Spalding LLP, Washington, DC (Gilbert B. Kaplan, Daniel L. Schneiderman and Joseph W. Dorn), for Defendant-Intervenor.

OPINION

POGUE, Judge.

In this action, Plaintiff Papierfabrik August Koehler AG and its subsidiary importer Koehler America, Inc. (collectively "Plaintiffs" or "Koehler") seek review of the United States International Trade Commission's ("Defendant" or "the Commission" or "ITC") final determination that the domestic producers of certain light weight thermal paper ("LWTP") are threatened with material injury by reason of imports of subject LWTP from Germany. See Certain Lightweight Thermal Paper from China and Germany, 73 Fed. Reg. 70,367 (ITC Nov. 20, 2008) (final determinations) ("Comm'n Final Determination").¹

Because the court concludes that the Commission's determination, issued pursuant to Section 735(b)(1)(A)(ii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1673d(b)(1)(A)(ii) (2006),² is supported by substantial evidence, Plaintiffs' motion for judgment on the agency record is denied, and the Commission's determination is affirmed in all respects. Plaintiffs essentially request that the court re-weigh evidence that the Commission alone has been authorized to weigh. See Goss Graphics Sys., Inc. v. United States, 22 CIT 983, 1008-09, 33 F.Supp.2d 1082, 1104 (1998) ("[T]he ITC has the discretion to make reasonable interpretations of the evidence and to determine the overall significance of any particular factor in its analysis[,] [and] the court may not reweigh the evidence or substitute its judgment for that of the ITC.") (quotation marks and citations omitted), aff'd 216 F.3d 1357 (Fed.Cir.2000).

The court has jurisdiction over this case pursuant to 28 U.S.C. § 1581(c).

BACKGROUND

A. Administrative Proceedings Below

Beginning with its September 19, 2007, petition to the United States Department of Commerce ("Commerce" or "the Department") and the Commission to initiate investigations of certain LWTP from China, Germany, and Korea,³ Appleton Papers, Inc. ("Appleton" or "Defendant-Intervenor") has alleged, inter alia, that these products were being sold at less than fair market value ("LTFV"). (Compl. ¶ 6; Def.-Intervenor's Mem. in Opp'n to Pls.' Mot. for J. on Agency R. Under Rule 56.2 ("Def.Intervenor's Mem.") 3-4; Comm'n Final Determination, 73 Fed.Reg. at 70,367.)

After notice and administrative proceedings, Commerce, on October 2, 2008, issued its final determination, pursuant to 19 U.S.C. § 1673d(a)(1), finding that imports of LWTP from Germany are being, or are likely to be, sold in the United States at LTFV. Lightweight Thermal Paper from Germany, 73 Fed.Reg. 57,326 (Dep't Commerce Oct. 2, 2008) (notice of final determination of sales at less than fair value) ("Commerce Final Determination"). Koehler was a mandatory respondent in this investigation, id. at 57,327 n. 4, and was assigned a weighted-average dumping margin⁴ of 6.50% for all subject merchandise. Id. at 57,328. All other respondents received the same 6.50% rate. Id. There is no indication in the record that Koehler contested this final determination.

Following Commerce's determination, on November 20, 2008, the Commission issued its final determination that a domestic industry is threatened with material injury by reason of LWTP imports from Germany. Comm'n Final Determination, 73 Fed.Reg. at 70,367; but see id. at 70,367 n. 2 (noting the dissenting opinions of Chairman Shara L. Aranoff, Vice Chairman Daniel R. Pearson, and Commissioner Deanna Tanner Okun). Giving effect to the Commission's determination, Commerce issued an antidumping duty order on LWTP from Germany. Lightweight Thermal Paper from Germany and the People's Republic of China, 73 Fed.Reg. 70,959 (Dep't Commerce Nov. 24, 2008) (antidumping duty orders)

Plaintiffs and Plaintiff-Intervenors now challenge the Commission's determination. Specifically, Plaintiffs contest the Commission's treatment of the relevant domestic industry; its decision to include the entire class of subject imports within its threat analysis; its determination regarding the likelihood of increase in German LWTP imports; its likely price effect determination; and its determination with respect to the vulnerability of the domestic industry. After describing the Commission's determinations and reasoning and explaining the relevant standard of review, the court will discuss each challenge in turn.

B. Commission Determinations and Reasoning

LWTP is paper with a thermal active coating which, when used in printers containing thermal print heads, reacts to heat to form images on paper. Comm'n Views at 5. This type of paper "is typically (but not exclusively) used in point-of-sale applications such as ATM receipts, credit card receipts, gas pump receipts, and retail store receipts." Commerce Final Determination, 73 Fed.Reg. at 57,327. Commerce's definition of the scope of imported merchandise under investigation included both "jumbo" rolls, a semifinished version of the product, and "slit" rolls, the end-use product. See Commerce Final Determination, 73 Fed.Reg. at 57,327 n. 5; Comm'n Views at 5. Producers of jumbo rolls are referred to as "coaters," whereas producers who subsequently convert the jumbo rolls into slit rolls are referred to as "converters." See Comm'n Views at 5-8. Koehler and Plaintiff-Intervenors are coaters who accounted for all imports of LWTP from Germany subject to the investigation at issue in this case. Id. at 3. Appleton is one of the two domestic coaters of LWTP. Id. at 15.

Most LWTP is sold in the United States in basis weights of either 48 grams per square meter ("48 gram") or 55 grams per square meter ("55 gram"). Id. at 16. During the POI, the Commission found that domestic coaters' shipments of 55 gram LWTP far exceeded their shipments of 48 gram LWTP, id.; in fact, "domestic industry did not produce comparable 48 gram jumbo rolls for the vast majority of the period of investigation." Id. at 30. Appleton introduced a 48 gram product in 2007, which became available in the fall of that year. Id. At the same time, the quantity of shipments to the United States of 55 gram LWTP from Germany declined during the POI, while the quantity of shipments of 48 gram LWTP increased. Id. at 16-17.

The Commission determined that subject imports of 55 gram LWTP from Germany generally oversold the domestic like product, see id. at 32, while subject imports of 48 gram LWTP from Germany generally undersold the domestic like product. See id.⁵ Nevertheless, the Commission found that sales of 48 gram LWTP from Germany "could not have taken significant sales or revenues from domestically produced 48 gram jumbo rolls throughout 2007, because Appleton did not offer such products during much of the year and [the other domestic coater] did not offer a competitive [] product." Id. at 36.

Although the Commission determined that "[o]verall domestic industry financial performance declined from 2005 to 2007," id. at 35, it did not "attribute the declines in 2007 financial performance to the increased quantities of subject imports from Germany, [] because the subject imports from Germany increased at a time of rising demand, did not capture significant additional market share, and did not have significant adverse price effects." Id. (footnote omitted). The Commission found that "the increase in subject imports from Germany involved [48 gram jumbo rolls, which were] types of products not consistently offered by the domestic industry, although by interim 2008 the domestic industry was increasingly selling 48 gram jumbo rolls." Id. at 30-31 (footnote omitted). Accordingly, the Commission "conclude[d] that the subject imports from Germany did not have a significant adverse impact on the domestic industry as a whole during the [POI]." Id. at 36 (footnote omitted).

Nevertheless, the Commission determined that a threat of material injury did exist to the domestic industry by reason of the subject LWTP imports from Germany. Comm'n Final Determination, 73 Fed. Reg. at 70,367; but see Comm'n Views at 36 n. 236 (noting that "Chairman Aranoff, Vice Chairman Pearson, and Commissioner Okun have made negative determinations on Germany and do not join the [threat of material injury portion] of this opinion" (citation omitted)). Specifically, the Commission found that "a continuation of the gradual increase in subject import volumes from Germany that occurred during the [POI] is likely in the imminent future," Comm'n Views at 36, noting that "[w]hile the German producers did not add any new LWTP production facilities during this period, they were able to increase capacity through a combination of achieving greater efficiencies and using capacity previously devoted to producing other products to produce LWTP instead," id. (citations omitted), and that "[t]he record contains no indication that the German producers cannot continue to increase capacity through such means in the imminent future." Id. (footnote omitted).

Further, the Commission...