Granges Metallverken AB v. US
| Decision Date | 07 June 1989 |
| Docket Number | Court No. 87-04-00583. |
| Citation | 13 CIT 471,716 F. Supp. 17 |
| Parties | GRANGES METALLVERKEN AB, et al., Plaintiffs, v. UNITED STATES, Defendant, and American Brass, et al., Defendants-Intervenors. |
| Court | U.S. Court of International Trade |
Sonnenberg, Anderson, O'Donnell & Rogriguez, Paul S. Anderson, Chicago, Ill., for plaintiffs.
Lyn M. Schlitt, General Counsel, James A. Toupin, Asst. General Counsel, U.S. Intern. Trade Com'n, Calvin H. Cobb, III, Washington, D.C., for defendant.
Collier, Shannon, Rill & Scott, David A. Hartquist, Jeffrey S. Beckington and Kathleen Weaver Cannon, Washington, D.C., for defendants-intervenors.
Plaintiffs move pursuant to Rule 56.1 of the Rules of this Court to challenge the decision of the United States International Trade Commission that a domestic industry is materially injured by reason of cumulated imports of brass sheet and strip from Sweden and other countries. Certain Brass Sheet and Strip from France, Italy, Sweden, and West Germany, Inv. Nos. 701-TA-270 and 731-TA-313, 314, 316 and 317 (Final), USITC Pub. No. 1951 (Feb. 1987). The Court has jurisdiction under 28 U.S.C. § 1581(c) (1982).
The Court holds that even if the Commission had found that some domestic purchasers perceived Swedish brass to be of a higher quality than other imports, the record supports the finding of a reasonable overlap in competition among imported and domestic brass to allow the Commission to cumulate Swedish brass with imports from Brazil, Canada, France, Italy, the Republic of Korea, and West Germany, even though domestic producers did not manufacture one brass sub-product during most of the period under investigation.
"Certain brass sheet and strip" refers to wrought brass sheet and strip of solid rectangular cross section over 0.006 inch but less than 0.188 inch in thickness, in coils or cut to length, whether or not corrugated or crimped, but not cut, pressed, or stamped to non-rectangular shape, and provided for in items 612.3960, 612.3952, and 612.3986 of the Annotated Tariff Schedules of the United States. USITC Pub.1951 at 6, A1 n. 1, A4. For tariff purposes brass sheet is over 20 inches wide, and strip is not over 20 inches wide. Id. at 6, A5. The generally accepted industry distinction between sheet and strip is that strip consists of brass that is coiled or wound on reels of whatever gauge or width, while sheet consists of brass that is no longer coiled or wound but has been cut to length. Id. at A5.
The brass products investigated are defined in the "C20000-series" under the nomenclature the Unified Numbering System and the equivalent "200-series" under the Copper Development Association numbering system. Id. at A4. The chief characteristics of C20000 series brass are ease of manufacture, fair electrical conductivity, excellent forming and drawing properties, and good strength. Id. at 7. Brass sheet and strip have numerous uses, including ammunition, automotive radiators, door hardware and bathroom accessories, electrical connectors, jewelry, and lamp bases. Id.
Plaintiffs submit that there is no substantial evidence to support cumulation of Swedish brass with other imports because the Commission (A) failed to account for substantial evidence relating to the fungibility of imported and domestic products, and (B) did not determine whether imported and domestic products are within a reasonable price range.
Plaintiffs state that the record is replete with evidence confirming the lack of fungibility and competition due to the superior quality of Swedish brass products as compared to brass products from other sources. R. List 1, Doc. 274, at 136-39, 143. Plaintiffs argue that the Commission failed to account for this evidence in its determination.
To invoke the cumulation statute, the imports to be cumulated must compete with one another and with the domestic like products they allegedly injure. 19 U.S.C. § 1677(7)(C)(iv) (Supp. V 1987); LMI—La Metalli Industriale, S.p.A. v. United States, 13 CIT ___, ___, 712 F.Supp. 959, 969 (1989); Mock, Cumulation of Import Statistics in Injury Investigations before the International Trade Commission, 7 Nw.J.Int'l L. & Bus. 433, 441 (1986).
In its earlier determination on Certain Brass Sheet and Strip from Brazil, Canada, and the Republic of Korea, Inv. Nos. 701-TA-269 and 731-TA-311, 315, and 315 (Final), USITC Pub.1930 (Dec. 1986), the Commission found evidence that domestic and imported C20000 series brass sheet and strip did "compete with one another" after it considered: (1) the degree of fungibility between the products; (2) the presence of sales or offers to sell in the same geographic markets; (3) the existence of common or similar channels of distribution; and (4) the simultaneous presence of imports in the market. Id. at 12-13. Referring to that earlier determination in its determination on Certain Brass Sheet and Strip from France, Italy, Sweden, and West Germany, the Commission stated that "in these investigations, no new information has been brought to our attention that leads us to believe that cumulation is inappropriate or that imports from any individual country should be excluded from a cumulative analysis." USITC Pub. 1951, at 12. In its decision to include Swedish imports in its cumulative analysis, the Commission considered the arguments of the Swedish producers that their imports should not be cumulated with those from other countries:
They raised a number of grounds on which their product allegedly did not compete with other imports or with the domestic like product. Post-Hearing Brief of Metallverken Inc. and Metallverken AB R. List 2, Doc. 30. at 1-4. However, these are the same arguments that were before us and that we rejected in Certain Brass Sheet and Strip from Brazil, Canada, and the Republic of Korea, Inv. Nos. 701-TA-269 and 731-TA-311, 315, and 315 (Final), USITC Pub. 1930 (Dec. 1986). Keeping in mind the range of product covered by this investigation, the differences that exist between the imports from Sweden and other imports and between the imports from Sweden and the domestic like product are not sufficient for us to find that the Swedish product does not compete with other imports or the domestic like product "in any meaningful sense."
USITC Pub.1951, at 12 n. 32 ().
Plaintiffs argue that Swedish products do not compete with other imports because:
Plaintiffs claim that there is substantial evidence showing that Swedish products are "of higher quality than others and that many of the imports are not as substitutable for domestic products due to lead times, metal-fixing methods and quality considerations." Id. at 20.
Plaintiffs also argue that "quality is the major factor considered by most purchasers in determining brass sheet and strip purchases." Id. at 11 (citing R. List 2, Doc. 73, at A107; USITC Pub.1951 at A78). Plaintiffs point out that in a customer survey conducted by the Commission staff, 64 percent cited quality as the most important factor in purchasing and over 85 percent ranked price and quality among the top three factors in their purchasing decisions. USITC Pub.1951 at A78. Additionally, "approximately one-half of the largest endusers stated that imported Swedish brass sheet and strip is superior to U.S. produced brass," and two distributors reported that mills in Sweden, West Germany, France, and Italy "produce brass strip with a better finish, or surface quality, and that some customers believe that finish is an indicator of metallurgical quality." Id. at A78-79. Plaintiffs also note that two end users mentioned that Swedish and West German brass is more consistent with respect to gauge control and yields more feet per pound than United States brass despite recent advances in statistical process control. Id. at A79. Three purchasers also reported paying a premium for West German brass and one purchaser reported paying a premium for Swedish brass. Id. at A79 n. 2.
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