Nucor Fastener Div. v. United States

• Decision Date: 11 August 2011
• Docket Number: Slip Op. 11–104.Court No. 09–00531.
• Citation: 791 F.Supp.2d 1269
• Parties: NUCOR FASTENER DIVISION, Plaintiff,v.UNITED STATES, DefendantandXL Screw Corporation, et al., Defendant–Intervenors.
• Court: U.S. Court of International Trade

791 F.Supp.2d 1269

NUCOR FASTENER DIVISION, Plaintiff,

v.UNITED STATES, DefendantandXL Screw Corporation, et al., Defendant–Intervenors.

Slip Op. 11–104.Court No. 09–00531.

United States Court of International Trade.

Aug. 11, 2011.

Wiley Rein LLP (Alan H. Price, Daniel B. Pickard, and Maureen E. Thorson), Washington, DC, for Plaintiff Nucor Fastener Division.James M. Lyons, General Counsel, Neal J. Reynolds, Assistant General Counsel for Litigation, U.S. International Trade Commission (Mary Jane Alves), for Defendant United States.Barnes, Richardson & Colburn (Matthew T. McGrath and Stephen W. Brophy), Washington, DC, for Defendant–Intervenors Porteous Fastener Co., Heads & Threads International LLC, Soule, Blake & Wechsler, Inc., Indent Metals, LLC, XL Screw Corporation, Bossard North America, the Hillman Group, Fastenal Co., and Fasteners and Automotive Products and Squire, Sanders & Dempsey, LLP, Phoenix, AZ, (Peter J. Koenig), for Defendant–Intervenors Brighton–Best International, Inc. and Brighton–Best International (Taiwan) Inc.¹

OPINION

WALLACH, Judge:

I

INTRODUCTION

Plaintiff Nucor Fastener Division challenges the negative preliminary injury determinations issued by the U.S. International Trade Commission (“ITC”) in antidumping and countervailing duty investigations of certain standard steel fasteners (“CSSF”) from the People's Republic of China (“China”) and Taiwan. ²See Plaintiff's Motion for Judgment on the Agency Record, Doc. Nos. 32, 36 (“Plaintiff's Motion”); Brief in Support of Nucor Fastener Division's Rule 56.2 Motion, Doc. Nos. 32, 36 (“Plaintiff's Memo”); Certain Standard Steel Fasteners From China and Taiwan; Determinations, 74 Fed.Reg. 58,978 (November 16, 2009); U.S. International Trade Commission, Certain Standard Steel Fasteners from China and Taiwan, Investigation Nos. 701–TA–472 and 731–TA–1171–1172 (Preliminary), USITC Pub. 4109 (November 2009) (“ITC's Report”); Views of the Commission (November 19, 2009), Confidential List (“CL”) 228 (“Views”); Certain Standard Steel Fasteners from China and Taiwan, Staff Report to the Commission on Investigation Nos. 701–TA–472 and 731–TA–1171–1172 (Preliminary) (November 2, 2009), CL 224 (“Staff Report”).³ The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). Because ITC's reliance on certain data collected in these investigations is arbitrary, capricious, and an abuse of discretion, Plaintiff's Motion is GRANTED, and this matter is REMANDED to ITC for action consistent with this opinion.

II

BACKGROUND

In 2009, in response to a petition filed by Plaintiff, the U.S. Department of Commerce (“Commerce”) initiated and ITC instituted an antidumping duty investigation of CSSF from Taiwan and both antidumping and countervailing duty investigations of CSSF from China. See Certain Standard Steel Fasteners From the People's Republic of China and Taiwan: Initiation of Antidumping Duty Investigations (“AD Notice”), 74 Fed.Reg. 54,537 (October 22, 2009); Certain Standard Steel Fasteners From the People's Republic of China: Initiation of Countervailing Duty Investigation, 74 Fed.Reg. 54,543 (October 22, 2009); Certain Standard Steel Fasteners From China and Taiwan (“CVD Notice”), 74 Fed.Reg. 49,889 (September 29, 2009). Commerce's initiation notices define CSSF as “certain standard nuts, standard bolts, and standard cap screws, of steel other than stainless steel” and expressly exclude, inter alia, “bolts, cap screws, and nuts produced for an original equipment manufacturer (OEM) part number specific to any” automobile, work truck, medium-duty passenger vehicle, or aircraft, each as elsewhere defined. AD Notice, 74 Fed.Reg. at 54,542–43; CVD Notice, 74 Fed.Reg. at 54,546–47.

By the time Commerce issued these notices, however, ITC had already prepared and transmitted its foreign producer,⁴ domestic producer, and domestic importer questionnaires. See Memorandum from Catherine DeFilippo, Office of Investigations, ITC, to The Commission, Re: Investigation Nos. 701–TA–472 and 731–TA–1171–1172 (Preliminary): Certain Standard Steel Fasteners from China and Taiwan—Supplemental Memorandum to the Staff Report (November 5, 2009), CL 227 (“Supplemental Memo”). The instructions accompanying these questionnaires provide a definition of CSSF that comes from the petition's scope language and that therefore makes no explicit reference to any automotive, aerospace, or OEM exclusion. See Instruction Booklet: General Information, Instructions, and Definitions for Commission Questionnaires, Certain Standard Steel Fasteners from China and Taiwan, Investigation Nos. 701–TA–472 and 731–TA–1172–1172 (Preliminary) (“Questionnaire Instructions”), Public List (“PL”) 8 at 5; Certain Standard Steel Fasteners from the People's Republic of China and Taiwan: Petition for the Imposition of Antidumping and Countervailing Duties Pursuant to Section 731 of the Tariff Act of 1930, As Amended, Volume I: Volume on Injury, CL 1 (“Petition”) at 3.⁵ The instructions define “standard fasteners” as those “that can be described from nationally recognized consensus standards documents and may be produced by any interested manufacturing facility.” Questionnaire Instructions, PL 8 at 5. They also distinguish standard fasteners from “modified standard” fasteners as well as from “specialty/patented fasteners,” a category that comprises “proprietary-patented” fasteners and “engineered special parts.” Id.

ITC sent questionnaires to “all” firms it believed produced CSSF in the United States, Staff Report at III–1–2, IV–1, certain firms it believed imported CSSF into the United States, id. at IV–1, and certain firms it “believed to be possible producers or exporters of CSSF” in China or Taiwan, id. at VII–1, VII–3. ITC received responses from 72 percent of those domestic producers (26 of 36 firms), id. at III–1, 46 percent of those particular domestic importers (36 of 78 firms), id. at IV–1, 35 percent of those particular foreign producers in China (12 of 34 firms), id. at VII–1, and an unspecified percent of those particular foreign producers in Taiwan, id. at VII–3.⁶ Some of these responses were deemed unusable as they were incomplete or untimely. Id. at III–1 nn. 1, 5, IV–1 n. 2. In addition, some responding firms certified that they did not produce, export, or import CSSF during the period of investigation (“POI”), and others provided data relating only to fasteners that were ultimately excluded from the scope of the investigation. Id. at III–1, IV–1, VII–1, VII–3.

In its questionnaires, ITC asked domestic producers as well as importers to report their transactions of CSSF and certain other fasteners during the period of investigation (“POI”) running from January 2006 through June 2009. See Staff Report at III–1, IV–1, C–4. Based on the responses of domestic producers, ITC concluded that Plaintiff is by far the largest domestic producer of CSSF, accounting for [[a certain]] percent of reported production in 2008. Id. at I II–2. The two largest reporting domestic producers together account for [[a larger]] percent of reported production in that year. Id. The reported production of a third firm, [[Producer A]] (“Producer A”), accounts for another [[smaller]] percent. Id. However, Plaintiff argued before ITC that this firm manufactured only nonstandard [[versions of a certain type of fastener]] and hence produced no CSSF during the POI. See Post–Conference Brief of Nucor Fastener (October 20, 2009), CL 234 at 1 n. 3.

ITC's domestic producer and importer questionnaires also solicited pricing data for the four specific “CSSF product categories” that Plaintiff had proposed in its petition. Staff Report at V–8.⁷ Some of the responding firms “reported useable price information, but not necessarily for all [pricing] products or periods.” Id. at V–8–9.⁸ That information covered between 1.1 and 3.6 percent of total reported CSSF shipments during the POI. Id. at V–9. ITC attributed these “limited coverage ratios” to “the large number of CSSF products.” Id. at V–9 n. 29.

In addition to these data, the domestic producer questionnaire requested “profit-and-loss statements for CSSF only.” Id. at VI–3 n. 1. However, some of the responding producers, including Producer A, “instead estimated all of their CSSF costs based upon the ratio of CSSF sales to all fastener sales. As a result, the [reported] profit margin for CSSF and all other fasteners was the same.” Id. These firms together account for [[a minority]] percent of reported production in 2008. Id. at III–2.

The domestic producer questionnaire also asked whether the recipient had experienced any negative financial effects, lost revenues, or lost sales as a result of CSSF imports from China and Taiwan and whether it anticipated any negative financial impacts from these imports. See, e.g., U.S. Producers' Questionnaire Response of Nucor Fastener, CL 101 (“Nucor's Questionnaire Response”) at III–14–15, VII–2–3. Six domestic producers accounting for [[a very significant]] percent of reported 2008 production identified negative financial effects. See Plaintiff's Memo at 33–34, 37; Staff Report at III–2. Five of these firms alleged that they had lost revenues or sales, and the sixth “stated that the prices of CSSF from China and Taiwan are so low that the firm does not bother to provide competing price quotes when product from these countries is being considered by a potential customer.” Staff Report at V–24; see id. at III–2.

In a unanimous vote, ITC determined that “there is no reasonable indication that an industry in the United States is materially injured or threatened with material injury by reason of imports of [CSSF] from China and Taiwan.” Views at 3. To reach these determinations, ITC also found “no likelihood that any evidence we would have obtained in any final phase of these investigations would” provide any such indication. Id. at 9. ITC's Views make extensive reference to its Staff Report. See generally Views.⁹

Plaintiff now challenges...