A. Hirsh, Inc. v. US

• Decision Date: 17 January 1990
• Docket Number: Court No. 89-06-00366.
• Citation: 729 F. Supp. 1360
• Parties: A. HIRSH, INC., Plaintiff, v. The UNITED STATES, Defendant, and Paint Applicators Trade Action Coalition (PATAC), Defendant-Intervenor.
• Court: U.S. Court of International Trade

729 F. Supp. 1360

A. HIRSH, INC., Plaintiff, v. The UNITED STATES, Defendant and Paint Applicators Trade Action Coalition (PATAC), Defendant-Intervenor.

Court No. 89-06-00366.

United States Court of International Trade.

January 17, 1990.

Susman & Associates, Barbara A. Susman, Chicago, Ill., for plaintiff.

Lyn M. Schlitt, Gen. Counsel, James A. Toupin, Asst. Gen. Counsel, Washington, D.C., George Thompson, U.S. Intern. Trade Com'n, for defendant.

Miller, Canfield, Paddock and Stone, Charles R. Johnston, Jr. and Doreen M. Edelman, Washington, D.C., for defendant-intervenor.

OPINION

RESTANI, Judge:

In this action plaintiff, A. Hirsh, Inc., challenges the United States International Trade Commission's (ITC) determination summarily denying plaintiff's request for review, based on changed circumstances, of the Commission's final affirmative determination under 19 U.S.C. § 1673d(b) (1988) that plaintiff's goods threatened an industry in the United States with material injury. See Natural Bristle Paint Brushes from the People's Republic of China, 51 Fed.Reg. 4662 (1986). In that determination the Commission found that the threat of material injury was caused by imports of natural bristle paint brushes from the People's Republic of China (PRC) at less than fair value (LTFV). Plaintiff's request under 19 U.S.C. § 1675(b) (1988) for review of that determination was filed on February 28, 1989.¹ Thereafter ITC requested comments to ascertain whether the review investigation should be commenced. Natural Bristle Paint Brushes From the People's Republic of China; Request for Comments Concerning the Institution of a Section 751(b) Review Investigation, 53 Fed.Reg. 9496 (1988). Following receipt of various comments, ITC, on May 18, 1989, dismissed summarily plaintiff's request that a review investigation be instituted stating only:

After consideration of the request for review and the responses to the notice inviting comments, the Commission has determined, pursuant to 19 U.S.C. 1675(b) and the rule of 19 CFR 207.45, that the request does not show changed circumstances sufficient to warrant institution of a review investigation, regarding natural bristle paint brushes from the People's Republic of China.

Dismissal of Request for Institution of a Section 751(b) Review Investigation; Natural Bristle Paint Brushes From the People's Republic of China, 54 Fed.Reg. 21491 (1989). ITC provided no further reasoning or analysis.

In its CIT RULE 56.1 motion for judgment on the record before the agency, plaintiff states that ITC's dismissal of its petition was arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with law because ITC failed to state the facts and legal conclusions to support its decision to deny plaintiff's request. Plaintiff also argues that ITC's decision was improper, because plaintiff demonstrated to ITC a reasonable presence of changed circumstances sufficient to warrant review of the original antidumping determination.

In its petition for review plaintiff asserted the following to support its view that the circumstances had changed warranting ITC to inquire further:

(a) the Commission's predictions as to the imminence of threat were erroneous, and in fact never materialized;

(b) there has been a rapid decline in Chinese paintbrush inventories in the United States to the point that such inventories virtually no longer exist;

(c) the U.S. paintbrush industry is healthy and the threat perceived not only failed to materialize, but it is now clear that revocation of the original dumping order would not cause the domestic industry material harm or the threat thereof;

(d) statistical data show that there has been and there continues to exist no threat of price suppression;

(e) Chinese paint brushes are, in fact, less competitive price-wise in comparison with other imports within the U.S. market, regardless of the application of a dumping order;

(f) the fundamental change in the PRC's economy in its shift from a non-market to a market economy warrants initiating of a review investigation;

(g) Revocation of the subject antidumping order will pose no threat of harm.

Plaintiff's Complaint at 2.

In response to plaintiff's 56.1 motion, the government maintains (1) that the Commission correctly determined not to institute a review investigation because the only "changed circumstances" alleged in the request for review were either irrelevant or legally insufficient, and (2) that in this circumstance the Commission's general legal conclusion was the only statutorily required "reasoning."

DISCUSSION

It is by now established that any reviewable determination requires a reasoned basis. See American Lamb Co. v. United States, 785 F.2d 994, 1004 (Fed.Cir. 1986) (citing S.REP. NO. 249, 96th Cong., 1st Sess. at 252 (1979)). See also Carlisle Tire and Rubber Co. v. United States, 5 CIT 229, 232-33, 564 F.Supp. 834, 837 (1983); Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984); Federal Election Comm'n v. Democratic Senatorial Campaign Comm., 454 U.S. 27, 31-2, 102 S.Ct. 38, 41-42, 70 L.Ed.2d 23 (1981); Zenith Radio Corp. v. United States, 437 U.S. 443, 450-51, 98 S.Ct. 2441, 2445, 57 L.Ed.2d 337 (1978). Failure of the decision-maker "to provide the court with the basis of its determination precludes the court from fulfilling its statutory obligation on review." Industrial Fasteners Group v. United States, 2 CIT 181, 190, 525 F.Supp. 885, 893 (1981), aff'd 710 F.2d 1576 (Fed.Cir.1983). Under this standard, although ITC is allowed wide latitude in its decision-making in this area, it is not exempt from articulating its reasoning. "Many choices of ITC involve `discretionary' considerations, but the choices generally must be explained so that the reviewing court may discern the path of reasoning which led to the final outcome." Asociacion Colombiana de Exportadores de Flores v. United States, 12 CIT ___, 704 F.Supp. 1068, 1071 (1988). Cf. Matsushita Electric Industrial Co., Ltd. v. United States, 750 F.2d 927, 932-33 (Fed.Cir.1984); Avesta AB v. United States, 12 CIT ___, 689 F.Supp. 1173, 1181 (1988).

In the instant case ITC failed to articulate the reasons for its particular application of law; it merely recited uninformative statutory language. Without an articulation of reasons the court cannot ascertain whether or not ITC's decision was arbitrary, capricious, or otherwise not in accordance with law.²

While some may argue that 19 U.S.C. § 1675(b) (1988) does not provide clearly for a statement of reasons supporting ITC's decision in this type of situation, the fact that judicial review is provided for in 19 U.S.C. § 1516a indicates that a statement of reasons is required. The court agrees with defendant that not all determinations under the antidumping laws require findings of fact, but a statement of reasons, at least, must contain specific legal conclusions reflecting a comprehensible rationale. Furthermore, the regulations referred to by ITC in its decision specifically require a statement of reasons. 19 C.F.R. § 207.45(3) (1989) states that "the request for a review of an order based on changed circumstances will be dismissed and a notice of the dismissal published in the FEDERAL REGISTER stating the reasons therefor" if ITC concludes there are no factors sufficient to warrant a review. Id. (emphasis supplied). Whether or not ITC's decisions are based on factual determinations or simply legal conclusions (defendant asserts the latter applies here), the court must determine whether the decision is a reasonable outcome under the standards applicable under the statute. As the statutory language of section 1675(b) is general, the court has attempted to determine what standards apply.

Explaining the applicable legal standard the Avesta court noted that given the prior history of such a case,³ the party seeking review bears the initial burden of showing the existence of changed circumstances sufficient to warrant a review, but it need not establish that the crucial factors that led to the affirmative determination do not exist. Avesta, 689 F.Supp. at 1181.⁴ The Avesta court also stated the petitioner must support its allegations with specific facts, and the agency may weigh evidence. Id. Finally, Avesta indicated that a "reasonable indication" standard does not apply. Id. at 1175. The court concludes from these various statements, which were derived after consideration of the entire statutory scheme, that, in order to obtain a review, plaintiff must present facts which, when weighed against the other facts presented, would convince a reasonable decision-maker that a full investigation is necessary to establish whether or not changed circumstances have obviated the need for the order in its present form.

When making its changed circumstances determination in the past under the general statutory standard, ITC has looked at two core factors to make its initial determination whether to grant or deny the petition to review — (1) import pattern following imposition of its order and (2) market conditions. ITC has denied requests when the import pattern has shown, for example, that (1) imports to the United States had increased on a value basis; (2) there had been no decrease of imports through a purchase of local manufacturing facilities; (3) the decrease in the volume of production was attributable to the order; or (4) petitioner's assertion of a change of technology was based on "merely a continuation of a trend" which was discussed in ITC's investigation resulting in the imposition of the order. Stainless Steel Plate From Sweden, 50 Fed.Reg. 43,613, 43,614 (1985). See also Drycleaning Machinery From West Germany, 47 Fed.Reg. 6119 (1982).

In addition, when looking at market conditions, ITC has declined to review its determination, based on changed circumstances, when it was shown that (1) there was an established domestic...