Mitsubishi Materials Corp. v. US

• Decision Date: 27 April 1993
• Docket Number: Court No. 91-06-00426.
• Citation: 820 F. Supp. 608
• Parties: MITSUBISHI MATERIALS CORP.; Nihon Cement Co., Ltd.; and Osaka Cement, et al., Plaintiffs, v. UNITED STATES and United States International Trade Commission, Defendants, v. The AD HOC COMMITTEE OF SOUTHERN CALIFORNIA PRODUCERS OF GRAY PORTLAND CEMENT, Defendant-Intervenor.
• Court: U.S. Court of International Trade

820 F. Supp. 608

MITSUBISHI MATERIALS CORP.; Nihon Cement Co., Ltd.; and Osaka Cement, et al., Plaintiffs, v. UNITED STATES and United States International Trade Commission, Defendants, v. The AD HOC COMMITTEE OF SOUTHERN CALIFORNIA PRODUCERS OF GRAY PORTLAND CEMENT, Defendant-Intervenor.

Court No. 91-06-00426.

United States Court of International Trade.

April 27, 1993.

COPYRIGHT MATERIAL OMITTED

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Akin, Gump, Hauer & Feld, Patrick F.J. Macrory and Spencer S. Griffith, for plaintiffs Onoda Cement Co., Ltd.

Graham & James, Yoshihiro Saito and Brian E. McGill, for plaintiffs Mitsubishi Materials Corp., Nihon Cement Co., Ltd., and Osaka Cement Co., Ltd.

Office of Gen. Counsel, U.S. Intern. Trade Com'n (Lyn M. Schlitt, Gen. Counsel, James A. Toupin, Asst. Gen. Counsel, and Judith M. Czako), for defendants.

Kilpatrick & Cody, Joseph W. Dorn and Michael P. Mabile, for defendant-intervenor.

Memorandum Opinion

GOLDBERG, Judge:

This action comes before the court on plaintiffs' motion for judgment upon the agency record and request for remand. Plaintiffs challenge the final affirmative injury determination by the United States International Trade Commission ("Commission") in Gray Portland Cement and Cement Clinker from Japan, USITC Pub. 2376, Inv. No. 731-TA-461 (Final) (Apr.1991); also published at 56 Fed.Reg. 21,391 (USITC 1991) as amended 56 Fed.Reg. 22053 (USITC 1991). The court sustains the Commission's determination in part. The court also finds that the Commission's determination, in part, was not based upon substantial evidence or in accordance with law, and grants plaintiffs' request for a remand as to the relevant part.

BACKGROUND

Defendant-Intervenor, the Ad Hoc Committee of Southern California Producers of Gray Portland Cement, filed an antidumping duty petition with the United States Department of Commerce ("Commerce") and the Commission on May 18, 1990. The petition alleged that imports of gray portland cement and cement clinker ("cement and cement clinker" or, collectively, "cement") from Japan were being sold in the United States at less than fair value, and that an industry in the United States was materially injured or threatened with material injury by reason of the imports.

Plaintiffs, Mitsubishi Materials Corp., Nihon Cement Co., Ltd., Osaka Cement Co., Ltd., and Ube Industries, Ltd., along with plaintiff Onoda Cement Co., Ltd., were Japanese exporters of the subject imports and participated in the proceedings before the Commission and Commerce as respondents.

Commerce initiated an antidumping duty investigation on June 7, 1990. Gray Portland Cement (Including Cement Clinker) from Japan, 55 Fed.Reg. 24,295 (Dep't Comm.1990) (Initiation of Investigation). The period of investigation was December 1, 1989 through May 31, 1990. Although Commerce's notice of initiation requested that interested parties notify Commerce of support for or opposition to the petition, no timely challenges to petitioners' standing to file the petition on behalf of the industry were filed.

The Commission issued its affirmative preliminary determination in July, 1990. See Gray Portland Cement and Cement Clinker from Japan, USITC Pub. 2297, Inv. No. 731-TA-461 (Prelim.) (July 1990); also published at 55 Fed.Reg. 28,465 (USITC 1990). Commerce issued its affirmative determination of sales at less than fair value on October 31, 1990. Gray Portland Cement and Clinker from Japan, 55 Fed.Reg. 45,831 (Dep't Comm.1990) (prelim. determination).

On February 13, 1991, plaintiffs filed a request that the Commission terminate its investigation on the grounds that defendant-intervenor did not represent the industry on whose behalf the petition was filed.

The Commission issued its final affirmative determination in April, 1991. Gray Portland Cement and Cement Clinker from Japan, USITC Pub. 2376, Inv. No. 731-TA-461 (Final) (Apr. 1991); also published at 56 Fed. Reg. 21,391 (USITC 1991), as amended 56 Fed.Reg. 22,053 (USITC 1991) ("Commission Report"). The Commission found that gray portland cement and clinker had a low value-to-weight ratio and was fungible. Further, its high transportation costs tended to make the areas in which it was produced and marketed isolated and insular. Commission Report at 16, 17. Additionally, inventories were generally not maintained for long, or at high levels, because of the high costs of storage. Commission Report at 25.

The Commission also found that cement production was historically subject to cyclical performance, with poor performance in periods of low or declining consumption, and boom performance during periods of high or increasing consumption. Commission Report at 28. It concluded that "over the period of investigation, the cement market in Southern California was characterized first by a strong surge in demand, and by declining consumption in the most recent period." Commission Report at 28.

The Commission also found that, pursuant to 19 U.S.C. § 1677(4)(C) (1988), in April, 1991 a regional industry in the United States was materially injured or was threatened with material injury by reason of unfairly traded imports. Commissioners Lodwick and Newquist ("the Commission majority") determined that the relevant industry was materially injured. Through the use of an aggregate analysis which was highlighted by producer-by-producer information, the Commission majority found that a sufficient percentage of the relevant industry was injured.

Also, in its determination, the Commission majority defined the regional industry as the domestic producers of cement in Southern California. In finding injury, the Commission majority cumulatively assessed the volume and effect of imports of a like product from Mexico with the subject Japanese imports. The cumulated Mexican imports were subject to an antidumping duty order issued on August 30, 1990. Gray Portland Cement and Clinker from Mexico, 55 Fed.Reg. 35,443 (Dep't Comm.1990) (Antidumping Duty Order).

In a separate opinion, Commissioner Rohr found that the industry was threatened with material injury. Commissioner Rohr determined that the relevant industry was threatened by material injury based upon a "percentage of production" analysis. In this method, Commissioner Rohr examined aggregate indicators of industry performance as well as how aggregates were affected by individual plant performance.

The Commission majority and Commissioner Rohr also rejected plaintiffs' request for termination on the grounds that Commerce retained exclusive jurisdiction to make standing determinations and to decide challenges to standing. Finally, Commissioner Brunsdale issued a negative determination of injury.

On May 10, 1991, Commerce issued an antidumping duty order, and amended its final determination to find 63.73 percent and 45.29 percent weighted-average dumping margins. Gray Portland Cement and Clinker from Japan, 56 Fed.Reg. 21,658 (Dep't Comm.1991) (Antidumping Duty Order).

Both plaintiffs Mitsubishi Materials Corp. et al. and Onoda Cement Co., Ltd. filed separate complaints before this court challenging several aspects of the Commission majority's and Commissioner Rohr's determinations. Ube Industries, Ltd., however, withdrew as a plaintiff on September 11, 1991. The court consolidated both actions together on November 1, 1991 under Mitsubishi Materials Corp., et al. v. United States, Consolidated Court No. 91-06-00426.

DISCUSSION

I. Standard of Review

An antidumping determination will be overturned only if it is not supported by substantial evidence on the record or otherwise not in accordance with law. 19 U.S.C. 1516a(b)(1)(B) (1988). "Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." N.A.R., S.p.A. v. United States, 14 CIT 409, 412, 741 F.Supp. 936, 939 (1990) (quoting Gold Star Co. v. United States, 12 CIT 707, 708-709, 692 F.Supp. 1382 (1988) aff'd, 8 Fed.Cir. (T) ___, 873 F.2d 1427 (1989)). See also Rhone Poulenc, S.A. v. United States, 8 CIT 47, 50, 592 F.Supp. 1318 (1984).

The possibility of drawing two inconsistent conclusions from the evidence does not prevent the agency's finding from being supported by substantial evidence. Consolo v. Federal Maritime Commission, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966). This standard of review accords deference to an agency's conclusions. It is not the court's function to decide that it would have made another decision on the basis of the evidence. Matsushita Elec. Indus. Co. v. United States, 3 Fed.Cir. (T) 44, 54, 750 F.2d 927 (1984). The court will affirm the determination of the Commission when it is reasonable and supported by the record as a whole, even where there is evidence which detracts from the substantiality of the evidence. Atlantic Sugar, Ltd. v. United States, 2 Fed.Cir. (T) 130, 136, 744 F.2d 1556 (1984).

Moreover, "if the statute is silent or ambiguous with respect to a specific issue, the question for the court is whether the agency's answer is based on a permissible construction of the statute." Chevron U.S.A. Inc. v. National Resources Defense Council Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984) (footnote omitted).

II. Concentration of Imports

In an antidumping duty investigation, the Commission is charged with determining whether:

(A) an industry in the United States—

(i) is materially injured, or

(ii) is threatened with material injury, or

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

by reason of imports....

19 U.S.C. §§ 1671d(b)(1) (1988) and 1673d(b)(1) (1988).

When defining "industry," 19 U.S.C. § 1677(4)(C) (1988) provides that the Commission may, in appropriate circumstances, employ a regional analysis of the domestic industry. In these cases:

the United States, for a particular product market, may be divided into 2 or more markets and the producers within

...