Gerald Metals, Inc. v. US, Slip Op. 96-142. Court No. 95-06-00782.

• Decision Date: 21 August 1996
• Docket Number: Slip Op. 96-142. Court No. 95-06-00782.
• Citation: 937 F. Supp. 930
• Parties: GERALD METALS, INC., Plaintiff, v. The UNITED STATES, U.S. International Trade Commission, Defendant, and Magnesium Corporation of America, International Union of Operating Engineers, Local 564, and United Steel Workers of America, Local 8319, Defendant-Intervenors.
• Court: U.S. Court of International Trade

937 F. Supp. 930

GERALD METALS, INC., Plaintiff, v. The UNITED STATES, U.S. International Trade Commission, Defendant, and Magnesium Corporation of America, International Union of Operating Engineers, Local 564, and United Steel Workers of America, Local 8319, Defendant-Intervenors.

Slip Op. 96-142. Court No. 95-06-00782.

United States Court of International Trade.

August 21, 1996.

Frederick P. Waite, Joseph Brooks, Denise Cheung (Popham, Haik, Schnobrich & Kaufman, Ltd), Washington, DC, for Plaintiff.

Lyn M. Schlitt, General Counsel; James A. Toupin, Deputy General Counsel; Andrea C. Casson, Attorney for Defendant, Office of the General Counsel, U.S. International Trade Commission.

Charles M. Darling, IV, Michael X. Marinelli (Baker & Botts, L.L.P.), Washington, DC, for Defendant-Intervenors.

OPINION

POGUE, Judge:

This case is before the Court on a motion for judgment upon the agency record pursuant to USCIT R. 56.2. Plaintiff Gerald Metals, Inc. ("Gerald Metals") brings this action under section 516A of the Tariff Act of 1930 for review of the final affirmative determination of the United States International Trade Commission ("Commission") that less-than-fair-value ("LTFV") imports of pure magnesium from Ukraine are causing material injury to the domestic industry.¹Magnesium from China, Russia, and Ukraine, 60 Fed. Reg. 26,456-57 (Int'l Trade Comm'n, May 17 1995) (final). The Commission's opinion is set forth in Magnesium from China, Russia, and Ukraine, USITC Pub. 2885, Inv. Nos. 731-TA-696-698 (May 1995) ("Determination").² The Court exercises its jurisdiction pursuant to 28 U.S.C. § 1581(c) (1994) and affirms the Commission's finding of material injury.

BACKGROUND

On March 31, 1994, Magnesium Corporation of America, International Union of Operating Engineers, Local 564, and United Steelworkers of America, Local 8319, filed an antidumping petition under section 773 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677b (1988),³ alleging material injury by reason of LTFV imports of pure and alloy magnesium from China, Russia, and Ukraine. In its preliminary determination, the Commission found reasonable indication of material injury to an industry in the United States because of imports of magnesium from the subject countries.⁴ On June 22, 1994, The Dow Chemical Company ("Dow") joined the petitioners.

The United States Department of Commerce, International Trade Administration ("Commerce") issued preliminary determinations that imports of magnesium from the three subject countries were being sold at less than fair value within the meaning of section 733(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1673b(b) (1988). The Commission then instituted its final investigations.⁵ On March 30, 1995, Commerce published final determinations of LTFV sales for imports of magnesium from all three subject countries.⁶

On May 17, 1995, the Commission published its final determinations in its investigations of imports of pure and alloy magnesium.⁷ The Commission determined that the domestic pure magnesium industry was materially injured by reason of LTFV imports of pure magnesium from China, Russia, and Ukraine.⁸ Three commissioners, Chairman Watson, Vice Chairman Nuzum, and Commissioner Crawford dissented, and each filed dissenting views. The Commission also unanimously determined that the domestic alloy magnesium industry was not materially injured or threatened with material injury by reason of LTFV imports of alloy magnesium from China and Russia.⁹

This action presents the following issues:

1. Whether the Commission considered the existence of fairly-traded imports of pure magnesium from Russia, available to domestic consumers at prices comparable to those of LTFV imports, and whether the existence of such fairly-traded imports should have precluded a finding that dumped imports were a cause of injury to the domestic industry?

2. Whether the Commission properly determined that Dow closed one of its magnesium plants because of the subject imports?

3. (a) Whether the Commission properly decided to close the period of investigation in June 1994 when the subject imports decreased?

(b) Whether the tight supply conditions which occurred in the domestic market during 1994 and the first quarter of 1995 preclude a finding of present material injury to the domestic industry by reason of subject imports?

STANDARD OF REVIEW

The Court will uphold a Commission determination in an antidumping investigation unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law...." 19 U.S.C. § 1516a(b)(1)(B)(i) (1994). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938); Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951); Matsushita Elec. Indus. Co., Ltd. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984). "The court is not empowered to substitute its judgment for that of the agency." Citizens To Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971); see also Matsushita, 750 F.2d at 936. "The possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026, 16 L.Ed.2d 131 (1966) (citations omitted); Matsushita, 750 F.2d at 936.

DISCUSSION

1. Did the Commission consider fairly-traded imports from Russia, and does their existence preclude a finding of material injury?

Vice Chairman Nuzum, in her dissenting views, found that "a sizeable portion of the imports from Russia were fairly traded. These imports undersold domestic product almost as frequently as did LTFV imports."¹⁰ Similarly, dissenting Commissioner Crawford noted that "dumped Russian imports and fairly traded Russian imports are very close, if not perfect, substitutes."¹¹

Plaintiff contends that the Commission did not consider fairly-traded imports of pure magnesium from Russia, nor their impact on the domestic market. Plaintiff avers that record evidence shows that such imports were no different from the dumped Russian imports in product quality, price, terms, and conditions of sale.¹² The only difference between fairly-traded Russian imports and LTFV Russian imports is that they are not traded by the same trading companies; some trading companies were assigned zero margins and others were assigned a margin of 100.25 percent.¹³ Plaintiff argues that if LTFV Russian imports had been removed from the domestic market, then fairly-traded Russian imports would have expanded to fill the market share left by LTFV Russian imports. Consequently, plaintiff claims, even in the absence of LTFV imports, the injury to the domestic industry would have been the same.

The thrust of plaintiff's argument is that there is no causal nexus between LTFV imports from Ukraine and material injury to the domestic industry. LTFV imports from China, Ukraine and Russia were found to compete directly in the market, and to be close substitutes. Plaintiff maintains that, absent any LTFV imports, domestic consumers would have purchased fairly-traded Russian imports, which would have replaced LTFV imports from China and Ukraine in the same way they would have replaced LTFV Russian imports.¹⁴ This demonstrates, according to plaintiff, that subject imports did not cause any material injury to the domestic industry.¹⁵ Instead, plaintiff complains, the Commission erroneously concluded that domestic product would have replaced all the subject imports.¹⁶

Defendant preliminarily objects that this claim was not raised before the Commission, and that plaintiff is estopped from raising it.¹⁷ However, the rule of exhaustion of administrative remedies is neither absolute nor inflexible, see 28 U.S.C. § 2637(d) (1994) (the court "shall, where appropriate, require the exhaustion of administrative remedies") (emphasis provided). Various exceptions have been articulated by this court. In this case, the Court will entertain the claim because the agency had an opportunity to consider the issue. Holmes Products Corp. v. United States, 16 CIT 1101, 1103-04, 1992 WL 394223 (1992). See also Ceramica Regiomontana, S.A. v. United States, 14 CIT 706, 708, 1990 WL 160253 (1990). The issue of the fairly-traded imports was discussed during the Commission's hearing,¹⁸ and was also considered by the dissenting Commissioners.¹⁹ Consequently, the rule of exhaustion of remedies does not apply here.

On the merits, the Commission correctly considered volume/price effects of LTFV imports, after the data reflecting fairly-priced imports had been separated from the data on LTFV imports.²⁰ The Commission found material injury by reason of LTFV imports.

Record evidence supports the fact that the Commission did consider the fairly-traded imports. As noted above, the issue was discussed at the Commission's hearing. Upon request by some Commissioners, the Office of Investigations transmitted to the Commission a memorandum which explained the result of the investigation with regard to fairly-traded Russian imports.²¹ Moreover, the Commission is presumed to have considered all relevant evidence on the administrative record.²² The Commission considered the presence and effects of fairly-traded Russian imports; therefore, its determination is in accordance with law.²³

Plaintiff relies on the assumption that fairly-traded Russian imports would replace all or the greatest part of the subject imports. The record shows no evidence supporting this claim.²⁴ The Commission found that subject imports from different countries competed with each other and with like domestic products, and the Commission cumulatively assessed the volume and effect of those imports.²⁵ The...