Calabrian Corp. v. US Intern. Trade Com'n, 90-09-00481.

• Decision Date: 13 May 1992
• Docket Number: No. 90-09-00481.,90-09-00481.
• Citation: 794 F. Supp. 377
• Parties: The CALABRIAN CORPORATION, Plaintiff, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, Defendant, and William Blythe & Co., Ltd., and BASF Corporation, Defendants-Intervenors.
• Court: U.S. Court of International Trade

794 F. Supp. 377

The CALABRIAN CORPORATION, Plaintiff, v. UNITED STATES INTERNATIONAL TRADE COMMISSION, Defendant and William Blythe & Co., Ltd., and BASF Corporation, Defendants-Intervenors.

No. 90-09-00481.

United States Court of International Trade.

May 13, 1992.

COPYRIGHT MATERIAL OMITTED

Brownstein Zeidman & Schomer, Steven P. Kersner and Ronald M. Wisla, Washington, D.C., on the motion, for plaintiff.

Lyn M. Schlitt, General Counsel, James A. Toupin, Assistant General Counsel, U.S. Intern. Trade Com'n, Elizabeth C. Hafner, Washington, D.C., on the motion, for defendant.

Dow, Lohnes & Albertson, William Silverman and Ryan Trainer, and Steptoe & Johnson, Richard O. Cunningham and Jay H. Reiziss, Washington, D.C., on the motion, for defendants-intervenors.

MEMORANDUM OPINION AND ORDER

CARMAN, Judge:

Plaintiff, Calabrian Corporation ("Calabrian"), contests the negative preliminary injury determination issued by the United States International Trade Commission ("Commission") in Certain Sodium Sulfur Chemical Compounds from the Federal Republic of Germany, the People's Republic of China, Turkey and the United Kingdom, USITC Pub. 2307, Inv. Nos. 701-TA-303, 731-TA-465-468 (Prelim.) (Aug. 1990) ("Determination") with respect to imports of sodium metabisulfite. The determination was published in the Federal Register. 55 Fed.Reg. 35,373 (Aug. 29, 1990). This Court has jurisdiction pursuant to 28 U.S.C. § 1581(c) and 19 U.S.C. § 1516a(a)(1)(C) (1988).

Plaintiff challenges the Commission's findings that sodium metabisulfite and sodium bisulfite constitute a single like product and the Commission's determination that there is no reasonable indication of material injury or threat of material injury by reason of allegedly subsidized and less than fair value imports of sodium metabisulfite from the Federal Republic of Germany, the People's Republic of China, Turkey, and the United Kingdom.

On the facts presented, this Court denies the Plaintiff's Motion for Judgment Upon the Agency Record and sustains the negative preliminary determinations of the Commission in its investigations of sodium metabisulfite from the People's Republic of China, the Federal Republic of Germany, Turkey, and the United Kingdom in all respects. This Court holds that the Commission did not abuse its discretion: (1) in applying the proper legal standard, (2) in finding sodium metabisulfite and sodium bisulfite to be single like products, (3) in declining to take into account the conditions of individual firms operating within the domestic industry, and (4) in concluding there was no reasonable indication of material injury or threat of material injury to the domestic market.

BACKGROUND

On July 9, 1990, Plaintiff filed a petition with the Commission and the United States Department of Commerce ("Commerce") alleging that an industry in the United States was materially injured, or threatened with material injury by reason of less than fair value (LTFV) imports of sodium metabisulfite and sodium thiosulfate, in their dry or liquid form, from the Federal Republic of Germany, the People's Republic of China, Turkey, and the United Kingdom ("subject countries") and by subsidized imports of sodium metabisulfite and sodium thiosulfate from Turkey.

Pursuant to sections 703 and 733 of the Tariff Act of 1930, the Commission instituted and conducted preliminary investigations. 19 U.S.C. §§ 1671b(a) and 1673b(a) (1988). As part of these investigations, the Commission sent questionnaires to all known United States producers and importers of sodium metabisulfite. A public conference was held in July 1990, during which all interested parties and their counsel were permitted to present testimony and to respond to questions from the Commission's staff. The parties thereafter were permitted to submit post-conference briefs and comments on business proprietary information. A staff report, containing a summary of the information obtained in the course of these investigations, was submitted to the Commission on August 15, 1990. On August 21, 1990, the Commission made its determination and on August 29, 1990, issued its opinion. Determination, USITC Pub. 2307, Inv. Nos. 701-TA-303, 731-TA-465-68 (Prelim.) (Aug. 1990).

The Commission determined that there were two domestically produced products like the merchandise subject to the investigations, namely, sodium metabisulfite, in dry or liquid form, and sodium thiosulfate, in dry or liquid form. Determination at 611 n. 9. Consequently, the Commission determined there were two domestic industries, one producing sodium metabisulfite in dry and liquid form and the other producing sodium thiosulfate in dry and liquid form. Id. at 10-11. As to sodium metabisulfite, in dry or liquid form, the Commission determined that there was no reasonable indication that a domestic industry was materially injured or threatened with material injury by reason of allegedly subsidized imports from Turkey, or by reason of allegedly less than fair value imports from the subject countries.¹ As to the sodium thiosulfate, however, the Commission determined that there was a reasonable indication of material injury to a domestic industry by reason of allegedly less than fair value and subsidized imports.² The Commission's preliminary determination concerning imports of sodium thiosulfate is not the subject of this action.

STANDARD OF REVIEW

In this civil action, Plaintiff challenges the Commission's determination 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 sodium metabisulfite from the Federal Republic of Germany, the People's Republic of China, Turkey, or the United Kingdom.

The standard of review of negative determinations by the Commission in preliminary investigations is whether the determination is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 19 U.S.C. § 1516a(a)(1)(C) and (b)(1)(A) (1988). The Supreme Court has defined this standard of review as follows:

Under the `arbitrary and capricious' standard the scope of review is a narrow one. A reviewing court must `consider whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.... Although this inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The court is not empowered to substitute its judgment for that of the agency.'

Bowman Transp., Inc. v. Arkansas-Best Freight Sys., Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 441, 42 L.Ed.2d 447 (1974), quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971).

In addition, Congress has emphasized that review of Commission determinations under the arbitrary and capricious standard is not a de novo review.

Section 516A would make it clear that traditional administrative law principles are to be applied in reviewing antidumping and countervailing duty decisions where by law Congress has entrusted the decision-making authority in a specialized, complex economic situation to administrative agencies. Thus, review of any determination listed in subsection (a)(1) would be to ascertain whether there was a rational basis in fact for the determination by the administrative decision-maker.

S.Rep. No. 249, 96th Cong., 1st Sess. 252 (1979); see American Lamb Co. v. United States, 4 Fed.Cir. (T) 47, 58-59, 785 F.2d 994, 1004 (1986).

The Court's examination of whether the agency has articulated the requisite rational connection between the facts found and the choice made must be measured in terms of the legal standard for preliminary determinations:

based upon the best information available to the Commission at the time of the determination, of whether there is a reasonable indication that —

(1) an industry in the United States —

(A) is materially injured, or

(B) is threatened with material injury, or

(2) the establishment of an industry in the United States is materially retarded,

by reason of imports of the merchandise which is the subject of the investigation by the administering authority.

19 U.S.C. § 1673b(a) (1988); see American Lamb, 4 Fed.Cir. (T) at 56, 785 F.2d at 1002.

The United States Court of Appeals for the Federal Circuit in American Lamb addressed both the purpose and standard of review in negative preliminary determinations. The Court recognized that "the purpose of a preliminary injury determination is to `eliminate unnecessary and costly investigations which are an administrative burden and an impediment to trade.'" Id. at 57, 785 F.2d at 1002-03 (quoting S.Rep. No. 1298, 93rd Cong., 2d Sess. 171). The Court further approved the Commission's view that a "reasonable indication" means more than a finding that there is a possibility of material injury and held that the Commission is empowered to weigh the evidence obtained during a preliminary investigation to determine if that evidence demonstrates that a reasonable indication of material injury or threat of material injury exists. Id. at 55-56, 785 F.2d at 1001-02.

In American Lamb the Court upheld the Commission's longstanding standard of determination under which no reasonable indication of material injury or threat of material injury exists if:

(1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final investigation.

Id. at 54-55, 785 F.2d at 1001.

In applying the reasonable indication standard, as interpreted in American Lamb, this Court has emphasized that review of a preliminary negative determination must conform to the principles set forth above.

Not only must the court avoid substituting its judgment for that of the agency, it may reverse the agency's action only where there is `a clear error of

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