Metallverken Nederland BV v. US

• Decision Date: 20 July 1990
• Docket Number: Court No. 88-09-00711.
• Citation: 744 F. Supp. 281
• Parties: METALLVERKEN NEDERLAND B.V., and Outokumpu Metallverken, Inc., Plaintiffs, v. UNITED STATES, Defendant, and American Brass, et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

744 F. Supp. 281

METALLVERKEN NEDERLAND B.V., and Outokumpu Metallverken, Inc., Plaintiffs, v. UNITED STATES, Defendant, and American Brass, et al., Defendant-Intervenors.

Court No. 88-09-00711.

United States Court of International Trade.

July 20, 1990.

Winthrop Stimson, Putnam & Roberts (Thomas V. Vakerics, Kenneth Berlin, Mark A. Monborne, James A. Meade, and Joni A. Laura); Arent, Fox, Kintner, Plotkin & Kahn (Stephen L. Gibson and Callie Georgeann Pappas), for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civil Div., U.S. Dept. of Justice (M. Martha Ries); Lyn M. Schlitt, Gen. Counsel, Judith M. Czako, Acting Asst. Gen. Counsel, U.S. Intern. Trade Com'n (Calvin H. Cobb, III), for defendant.

Collier, Shannon & Scott (David A. Hartquist, Jeffrey S. Beckington, and Kathleen Weaver Cannon), for defendant-intervenors.

DiCARLO, Judge:

Metallverken Nederland, a Dutch brass manufacturer, and Outokumpu Metallverken, an importer of Japanese brass, seek review of the remand results ordered in Metallverken Nederland B.V. v. United States, 13 CIT ___, 728 F.Supp. 730 (1989). On remand, the United States International Trade Commission determined that the domestic brass industry is materially injured or threatened with material injury by reason of dumped imports of rolled brass sheet and strip from the Netherlands and Japan. Certain Brass Sheet and Strip From Japan and the Netherlands, Inv. Nos. 731-TA-379 and 380 (Final) (Remand), USITC Pub. 2255 (Jan. 1990).

The Court finds that this determination is supported by substantial evidence and in accordance with law. As the Court has found the views of three commissioners to be supported by substantial evidence and in accordance with law, it is unnecessary to determine whether a fourth commissioner's affirmative findings on remand in substitution of a former commissioner's negative findings in the original determination were ultra vires.

BACKGROUND

In Metallverken Nederland B.V. v. United States, 13 CIT ___, 728 F.Supp. 730 (1989), this Court remanded the portion of the Commission's affirmative material-injury determination addressing threat of material injury because there was substantial doubt whether a mistake of fact as to the date of suspension of liquidation in Commissioner Rohr's analysis of market penetration by Dutch and Japanese brass flawed the determination. The Court also requested a more specific statement in the threat analysis whether expanded Japanese capacity is likely to result in a significant increase in brass exports to the United States and whether there is a real and imminent threat of material injury.

On remand, Commissioner Rohr stated that the mistake in the date of suspension of liquidation had no effect on his analysis of market penetration. He also found that increased Japanese capacity is likely to result in a significant increase in exports to the United States and that the threat of material injury is real and imminent. Plaintiffs argue these findings are unsupported by substantial evidence and are otherwise not in accordance with law.

Although he had not participated in the original determination and questioned the propriety of his participation on remand, Commissioner Newquist believed the remand order and decisions of this court compelled him to provide his views in the remand determination. These views concurred with the affirmative material-injury findings of Commissioners Eckes and Lodwick previously affirmed by the Court. The addition of Commissioner Newquist's findings changed the original three-commissioner majority to a majority of four commissioners in the remand determination. Plaintiffs argue that the remand order only called for the participation of Commissioner Rohr, and that Commissioner Newquist addressed questions beyond those specified in the remand order. Plaintiffs contend that the Commissioner's additional findings are, therefore, outside the scope of the remand and ultra vires. The Court requested additional briefs on this question.

DISCUSSION

I. THREAT OF MATERIAL INJURY DETERMINATION ON REMAND

A. Mistake of Fact as to the Date of Suspension of Liquidation

In his evaluation of import volumes in the original determination, Commissioner Rohr attempted to explain a 1987 decline in market penetration by Dutch and Japanese imports. He noted that the figures "may have been affected by the suspension of liquidation," but erroneously stated that date to be September 1987 rather than February 1988. USITC Pub. 2099 at 32-33. The Court ordered a remand because it was "unable to ascertain to what extent the Commissioner relied on this factor in his analysis and whether his conclusion would have been different had he known the actual date of suspension of liquidation." Metallverken Nederland, 13 CIT at ___, 728 F.Supp. at 743.

Commissioner Rohr responded that the date of suspension of liquidation had no special relevance but was mentioned to illustrate his point regarding changes in the import-volume data attributable to the agency proceedings and the weight to be given those data. USITC Pub. 2255 at 5-6. He explained that the "underlying question was whether the data for 1987 and 1988 reflected normal, ordinary commercial activity or whether they may reflect aberrations caused by our investigations." Id. at 6-7.

The Commissioner's conclusion as to the probative value of the data remained unchanged in light of the actual date of suspension of liquidation. He explained that the suspension

is not the only action in connection with a dumping action that may affect the behavior of the buyers and sellers in the market. Affirmative preliminary determinations of the Commission may also affect the market. The initiation of a dumping case in the first instance, and even the filing or rumored filing of a dumping case, can also affect the decision to buy and sell domestic or imported product.

Id. at 5, 6. The Commissioner remarked that the antidumping petition in this investigation was filed in July 1987, Commerce initiated the investigation in August 1987, the Commission made its preliminary determination in September 1987, and Commerce, which was to make its preliminary determination in December 1987, issued it in February 1988, at which time liquidation of entries was suspended. Id. Thus, he commented:

I had less confidence that 1987 yearly data and the interim 1988 data reflected normal operating conditions from which I would make projections about the future. I did not believe that the declines that the data show would have occurred absent the investigation nor did I believe that they would be reflective of trends were the investigation to be terminated after a negative finding.

This point ... is equally compelling given that September 1987 was the date of the Commission preliminary determination, which is also likely to have an effect on the market, rather than being the date of the Commerce affirmative determination.

Id. at 7.

Plaintiffs contend that the Commissioner's analysis reveals an "arbitrary and capricious rejection of market penetration data as inherently suspect and unreliable" merely because they happen to fall within the period of the antidumping investigation. Plaintiffs' Comments on Remand Determination at 16 (Plaintiffs' Comments).

Plaintiffs' argument is unpersuasive. The court has previously stated that "the initiation of antidumping and countervailing duty proceedings can create an artificially low demand for affected imports, thus distorting the data on which the Commission relies in making its determination." USX Corp. v. United States, 11 CIT 82, 88, 655 F.Supp. 487, 492 (1987); see also Rhone Poulenc, SA v. United States, 8 CIT 47, 53, 592 F.Supp. 1318, 1324 (1984). Commissioner Rohr evaluated 1987 and 1988 import-penetration data and, finding them to be unrepresentative of normal operating conditions, tempered his reliance on the data accordingly. See Wieland Werke, AG v. United States, 13 CIT ___, 718 F.Supp. 50, 61 (1989) ("the Commission acted reasonably in gathering the data, identifying its inherent weaknesses, and tempering its reliance on the data"). Plaintiffs have failed to show that this finding is unsupported by substantial evidence on the record and not in accordance with law.

B. Productive Capacity and Capacity Utilization

Under 19 U.S.C. § 1677(7)(F)(i)(II), the Commission is directed to consider "any increase in production capacity or existing unused capacity in the exporting country likely to result in a significant increase in imports of the merchandise to the United States." In assessing this factor in his original findings, Commissioner Rohr stated that "given the overall decline in Japanese home market sales, the increase in Japanese capacity must be devoted to exports either to the United States or other foreign countries." USITC Pub. 2099 at 33.

In its prior opinion, the Court held that the Commissioner could reasonably conclude from the evidence that increased Japanese capacity would be devoted to exports. Metallverken Nederland, 13 CIT at ___, 728 F.Supp. at 744. The plaintiffs claimed, however, that the Commissioner made no finding and the record contains no evidence that increased exports would go to the United States. The Court agreed with the government's contention that it could infer from the Commissioner's findings that he concluded increased exports would be directed to the United States market. Nonetheless, as the Court was remanding on another issue, it requested "an explicit statement with some analysis whether increased capacity is likely to result in a significant increase in exports to the United States." Id.

In his findings on remand, the Commissioner remarked:

That capacity exists to expand exports to the United States at the discretion of the foreign producers is itself threatening. Of course, any showing that it is actually likely to increase shipments to the United States increases

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