United Steel, Paper & Forestry, Rubber, Mfg., Energy, Allied Indus. & Serv. Workers Int'l Union v. United States

• Decision Date: 01 November 2018
• Docket Number: Slip Op. 18- 151,Court No. 17-00078
• Citation: 348 F.Supp.3d 1328
• Parties: UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO, CLC, Plaintiff, v. UNITED STATES, Defendant, and Cooper Tire & Rubber Company, China Rubber Industry Association, and China Chamber of Commerce of Metals, Minerals and Chemicals, Defendant-Intervenors.
• Court: U.S. Court of International Trade

348 F.Supp.3d 1328

UNITED STEEL, PAPER AND FORESTRY, RUBBER, MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE WORKERS INTERNATIONAL UNION, AFL-CIO, CLC, Plaintiff,

v. UNITED STATES, Defendant,andCooper Tire & Rubber Company, China Rubber Industry Association, and China Chamber of Commerce of Metals, Minerals and Chemicals, Defendant-Intervenors.

Slip Op. 18- 151

Court No. 17-00078

United States Court of International Trade.

Dated: November 1, 2018

Geert M. De Prest and Jennifer M. Smith, Stewart and Stewart, of Washington, D.C., argued for Plaintiff United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC. With him on the brief were Elizabeth J. Drake, Terence P. Stewart, and Philip A. Butler. Nicholas J. Birch, Lane S. Hurewitz, and Patrick J. McDonough also appeared.

David A.J. Goldfine, Attorney, Office of the General Counsel, U.S. International Trade Commission, of Washington, D.C., argued for Defendant United States. With him on the brief were Dominic L. Bianchi, General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.

Ned H. Marshak, Grunfeld Desiderio Lebowitz Silverman & Klestadt, LLP, of New York, N.Y., argued for Defendant-Intervenors China Rubber Industry Association and China Chamber of Commerce of Metals, Minerals and Chemicals. With him on the brief were Max F. Schutzman and Jordan C. Kahn. Andrew T. Schutz and Eve Q. Wang also appeared.

Gregory C. Dorris, Pepper Hamilton, LLP, of Washington, D.C., appeared for Defendant-Intervenor Cooper Tire & Rubber Company.

OPINION AND ORDER

Choe-Groves, Judge:

This action involves a negative material injury determination regarding truck and bus tires from the People's Republic of China ("China"). Tires covered by this case include new pneumatic rubber tires certified by the U.S. Department of Transportation for on-road or highway use. See Truck and Bus Tires From China, USITC Pub. 4673 at 6, Inv. Nos. 701-TA-556 and 731-TA-1311 (Mar. 2017), available at https://www.usitc.gov/publications/701_731/pub4673.pdf (last visited Oct. 26, 2018) (" USITC Pub. 4673"). The tires are designed for use with vehicles that transport heavy cargo and passengers on roads and highways. See id. Plaintiff United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial Service Workers International Union AFL-CIO, CLC ("USW") challenges the final negative material injury determination of the U.S. International Trade Commission ("Defendant," "ITC," or "Commission") in the antidumping and countervailing duty investigations of truck and bus tires from China. See Truck and Bus Tires From China, 82 Fed. Reg. 14,232 (Int'l Trade Comm'n Mar. 17, 2017) ; see also USITC Pub. 4673 ; Final Consolidated Staff Report and Views, CD 384, Doc. No. 612161 (May 18, 2017).

Before the court is a Rule 56.2 motion for judgment on the agency record filed by USW. See Pl.'s Rule 56.2 Mot. J. Agency R., Sept. 1, 2017, ECF No. 29; see also Pl.'s Mem. P. & A. Supp. Mot. J. Agency R., Sept. 1, 2017, ECF No. 31 ("Pl.'s Mem."). Plaintiff contends that the Commission's final determination that imports of truck and bus tires from China have not materially injured the U.S. truck and bus tire industry is unsupported by substantial evidence and is not in accordance with the law. See Pl.'s Mem. 1–3. The ITC opposes the Rule 56.2 motion and requests that the court sustain the final determination. See Def. U.S. Int'l Trade Comm'n's Mem. Opp'n Pl.'s Mot. J. Agency R., Oct. 31, 2017, ECF No. 37 ("Def.'s Resp."). Defendant-Intervenors China Rubber Industry Association, China Chamber of Commerce of Metals, Minerals & Chemical Importers (collectively, "CRIA"), and Cooper Tire & Rubber Company (collectively, "Defendant-Intervenors") support the ITC's position. See Def.-Intervenors' Resp. Pl.'s Rule 56.2 Mot. J. Agency R., Oct. 31, 2017, ECF No. 35 ("Def.-Intervenors' Resp.").

For the reasons set forth below, the court sustains in part and remands in part the Commission's final determination. Plaintiff's motion for judgment on the agency record is granted in part.

PROCEDURAL HISTORY

USW filed antidumping and countervailing duty petitions on truck and bus tires with the U.S. Department of Commerce ("Commerce") and the ITC on January 29, 2016. See USITC Pub. 4673 at 1. The Commission initiated an investigation and determined preliminarily that there was a reasonable indication that the domestic industry was materially injured or threatened with material injury by reason of subject imports. See Truck and Bus Tires From China, 81 Fed. Reg. 14,888, 14,888 (Int'l Trade Comm'n Mar. 18, 2016) (preliminary determination).

The Commission published its final determination on March 17, 2017. See Truck and Bus Tires From China, 82 Fed. Reg. at 14,232. A majority of the Commissioners found that the domestic industry was neither materially injured nor threatened with material injury by reason of imports of the subject merchandise from China. See id.

USW initiated proceedings in this court, contesting various aspects of the Commission's final determination. The court held oral argument on Plaintiff's Rule 56.2 motion for judgment on the agency record on May 15, 2018. See Confidential Oral Argument, May 15, 2018, ECF No. 58.

ISSUES PRESENTED

The court considers the following issues:

1. Whether the Commission's findings regarding the conditions of competition, particularly substitutability, tiers, and relative importance of price, are supported by substantial evidence;

2. Whether the Commission's negative adverse price effects determination is supported by substantial evidence and in accordance with the law;

3. Whether the Commission's negative adverse impact determination is supported by substantial evidence and in accordance with the law; and

4. Whether the Commission's negative threat determination is supported by substantial evidence and in accordance with the law.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2012) and Section 516A(a)(2)(B)(ii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(ii), which grant the court authority to review actions contesting the ITC's final negative injury determination following an antidumping or countervailing duty investigation. The court will uphold the ITC's determinations, findings, or conclusions unless they are unsupported by substantial evidence on the record, or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i) ; see also Siemens Energy, Inc. v. United States, 806 F.3d 1367, 1369 (Fed. Cir. 2015). The possibility of drawing two inconsistent conclusions from the evidence does not prevent the court from holding that the Commission's determinations, findings, or conclusions are supported by substantial evidence. See Nippon Steel Corp. v. United States, 458 F.3d 1345, 1352 (Fed. Cir. 2006) (citing Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001) ); see also Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966).

DISCUSSION

I. Legal Framework

In order to make an affirmative material injury determination, the ITC must find that (1) material injury existed and (2) the material injury was caused by reason of the subject imports. See Swiff-Train Co. v. United States, 793 F.3d 1355, 1359 (Fed. Cir. 2015) (quoting Gerald Metals, Inc. v. United States, 132 F.3d 716, 719 (Fed. Cir. 1997) ). Material injury is defined by statute as harm that is not inconsequential, immaterial, or unimportant. 19 U.S.C. § 1677(7)(A). To determine whether a domestic industry has been materially injured or threatened with material injury by reason of unfairly subsidized or less than fair value imports, the Commission considers:

(I) the volume of imports of the subject merchandise,

(II) the effect of imports of that merchandise on prices in the United States for domestic like products, and

(III) the impact of imports of such merchandise on domestic producers of domestic like products, but only in the context of production operations within the United States.

Id. § 1677(7)(B)(i). The Commission may consider such other economic factors as are relevant to the determination regarding whether there is material injury by reason of imports. Id. § 1677(7)(B)(ii). No single factor is dispositive and the significance to be assigned to a particular factor is for the ITC to decide. See S. Rep. No. 96-249, at 88 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 474.

The statute neither defines the phrase "by reason of" nor provides the ITC with guidance on how to determine whether the material injury is by reason of subject imports. The Court of Appeals for the Federal Circuit has interpreted the "by reason of" statutory language to require the Commission to consider the volume of subject imports, their price effects, their impact on the domestic industry, and to establish whether there is a causal connection between the imported goods and the material injury to the domestic industry. See Swiff-Train Co., 793 F.3d at 1361 ; see also S. Rep. No. 96-249, at 57–58, 74–75 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 443–44, 460–61.

II. The Parties' Challenges to the Commission's Final Negative Material Injury Determination

USW disputes various findings made by the Commission that contributed to the final negative material injury determination. The court addresses each finding in turn.

A. The Commission's Assessment of the Conditions of Competition

USW contends that the Commission's findings on the conditions of competition, specifically regarding substitutability, tiers, and relative importance of price, are not supported by substantial evidence. See Pl.'s Mem. 6–17. In analyzing the conditions of competition, the Commission determined that purchasers would buy higher-priced tires due to perceived differences between domestic and Chinese tires in quality, warranties, tiers, and other non-price features. See USITC...