958 F.Supp. 624 (CIT. 1997), 96-10-02360, NEC Corp. v. United States Dept. of Commerce

Docket Nº:Court No. 96-10-02360.
Citation:958 F.Supp. 624
Party Name:NEC CORPORATION and HNSX Supercomputers, Inc., Plaintiffs, v. UNITED STATES DEPARTMENT OF COMMERCE, et al., Defendants, Cray Research, Inc., Defendant-Intervenor. Slip Op. 97-23.
Case Date:February 12, 1997
Court:Court of International Trade

Page 624

958 F.Supp. 624 (CIT. 1997)

NEC CORPORATION and HNSX Supercomputers, Inc., Plaintiffs,



Cray Research, Inc., Defendant-Intervenor.

Slip Op. 97-23.

Court No. 96-10-02360.

United States Court of International Trade.

Feb. 12, 1997

Page 625

[Copyrighted Material Omitted]

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Paul, Weiss, Rifkind, Wharton, & Garrison (Robert E. Montgomery, Jr., Terence J. Fortune, Robert P. Parker, David J. Weiler). Washington, DC, for Plaintiffs.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director; Jeffrey M. Telep, Attorney, U.S. Department of Justice, Civil Division, Commercial Litigation Branch; Lucius B. Lau, Attorney-Advisor, Washington, DC, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of counsel, for Defendants.

Wilmer, Cutler & Pickering (John D. Greenwald, Stuart M. Weiser), Washington, DC, for Defendant-Intervenor.


POGUE, Judge.

The defendants are hereby ordered to produce the following, on or before 10:00 A.M., Tuesday, Feb. 18, 1997:

1. For in camera review: all documents that concern or relate to the Department's predecisional memorandum or to a commitment to a particular outcome with respect to the dumping of vector super-computers produced in Japan;

2. For in camera review: all documents reflecting the nature and content of the discussion at meetings identified in response to Court-ordered discovery;

3. For in camera review: all documents concerning the Department of Commerce's communications with Cray Research, Inc. between April 1, 1996 and May 20, 1996;

On or before 5:00 P.M., Monday, Feb. 24, 1997:

4. Mr. Stuart Eizenstat, for oral deposition upon written questions to determine whether he has made an advance commitment to a particular outcome in the antidumping investigation of vector supercomputers from Japan;

5. Ms. Susan Esserman and Mr. Paul Joffe for deposition upon oral examination to determine whether they have made an advance commitment to a particular outcome in the antidumping investigation of vector supercomputers from Japan;

6. Assistant Secretary Mr. Robert LaRussa to respond to written interrogatories addressing (a) his receipt of outcome directives, (b) any constraints placed upon him by the predecisional memorandum, (c) the extent to which decisions in the Supercomputer Investigation will be made by him, and (d) any involvement he had in the deliberations concerning the predecisional memorandum between May 20, 1996 and June 5, 1996;

7. Mr. Christian Marsh to respond to a written interrogatory addressing any directives he has received with respect to the outcome of the Supercomputer Investigation.


This action arises from an antidumping investigation initiated by the United States Department of Commerce (Commerce) on August 20, 1996. The investigation was initiated in response to a petition filed by Cray Research, Inc. (Cray) on July 29, 1996 alleging

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that NEC Corporation and HNSX Supercomputers, Inc., a wholly owned American subsidiary of NEC, had offered to sell four SX-4 supercomputers to the University Corporation for Atmospheric Research (UCAR) at a price that was less than fair value. Both Cray and NEC had submitted bids in response to a request for proposals issued by UCAR in March 1995 seeking high performance computing equipment. UCAR, a non-profit corporation, is funded in large part by the National Science Foundation (NSF), an agency of the United States government.

Plaintiffs commenced this suit on October 15, 1996 to enjoin continuation of the antidumping investigation, 1 claiming that Commerce had impermissibly prejudged the issues presented by Cray's antidumping petition. Specifically, NEC alleged that "Commerce is biased and has prejudged Cray's dumping allegations," and that "Commerce determined as a matter of institutional policy to block UCAR's procurement of NEC supercomputers, and thereafter engaged in a systematic and coordinated effort to implement this policy through misuse of the antidumping laws." (Pls.' Res. to Defs.' Supp. to their Mot. to Dismiss at 4 (Dec. 19, 1996)). As evidence of its prejudgment claim, NEC produced a letter dated May 20, 1996 and signed by Mr. Paul Joffe, then Commerce's Acting Assistant Secretary for Import Administration, to Dr. Neal Lane, Director of the NSF, stating, inter alia:

... the cost of production of one of the foreign bidders is substantially greater than the funding levels projected by NCAR's request for proposals. In antidumping law terms, this means that the "dumping margins," that is, the amount by which the fair value of the merchandise to be supplied exceeds the export price, is likely to be very high.

(Pls.' Ex. D). Mr. Joffe also sent Dr. Lane a document entitled Predecisional Memorandum containing a numerical analysis estimating that NEC's dumping margin would be between 190% and 280%. Although Commerce sent the communications only to the NSF, both have since been published. See inside U.S. Trade (May 24, 1996 and Sept. 13, 1996)(Pls.' Ex. G). Commerce's Preliminary Determination in the investigation is expected to be published on February 25, 1997.


On November 12, 1996 plaintiffs filed a request for expedited discovery to which was attached NEC's first request to Commerce and Cray for the production of documents. Specifically, NEC requested inter alia "all [21 C.I.T. 200] documents reflecting or relating to": the UCAR Request for Proposals, communication between Commerce and Cray concerning the acquisition of supercomputers, and the antidumping investigation. At that time, NEC also said that it expected to depose "the three key figures the Department has identified as having knowledge of the matters before the Court: Susan Esserman, Paul Joffe, and Christian Marsh." (Mem. in Supp. of Pls.' Proposed Scheduling Order and Request for Expedited Disc. at 18 (Nov. 12, 1996)). The Court ordered the parties to work out a limited discovery schedule pursuant to paragraph 24 of Plaintiffs' complaint (Tr. of Nov. 13, 1996 Tel. Conf. at 23-24), which alleges:

prior to the May 20, 1996 announcement by UCAR, one or more meetings involving representatives of the National Science Foundation, the Department of Commerce, the Office of Science and Technology Policy, and other agencies of the federal government were convened to discuss UCAR's potential acquisition of a Japanese supercomputer. During these meetings, Commerce representatives repeatedly stated that the NEC supercomputers were being offered to UCAR at less than fair value.

(Compl.¶ 24). When the parties were unable to agree on the appropriate scope of discovery, the Court ordered the government to provide plaintiffs with a list of all interagency meetings discussing the UCAR acquisition, involving "decision-makers and perhaps one level below the assistant secretary, ... that have discussed the UCAR acquisition...."

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The court also asked the defendant to identify all participants in those meetings. (Tr. of Nov. 21, 1996 Tel. Conf. at 31-32). Defendants served their response on November 27, 1996, identifying five such meetings involving 21 Commerce officials and representatives of eight other agencies.

On December 6, 1996, defendants submitted a Supplement to their Motion to Dismiss claiming that plaintiffs' case had been rendered moot because all of the agency officials who had been involved with the events leading up to the preparation and dissemination of the Predecisional Memorandum had moved into new positions, and would therefore not be involved with the investigation of vector supercomputers from Japan. (Defs.' Supp. to Their Mot. to Dismiss at 6-7 (Dec. 6, 1996)). Attached to the Supplement were declarations from Mr. Eizenstat, Ms. Esserman, and Mr. Joffe all stating that they would not be the decisionmaker in the supercomputer investigation and a declaration from Mr. LaRussa stating that he was the decisionmaker in antidumping duty proceedings and that he had no involvement in interagency meetings or other events leading up to the preparation of the May 20, 1996 letter to the National Science Foundation.

On Dec. 23, 1996, the Court ordered the parties to prepare stipulations concerning the Department of Commerce's antidumping administrative process together with the tenure of certain Commerce Department officials in their current and past positions. (Tr. of Dec. 23, 1996 Tel. Conf. at 18-19). The Parties filed their lists and accompanying comments on January 7, 1997.

On January 2, 1997 plaintiffs again submitted a request for documents relating "directly or indirectly" to meetings that took place prior to May 20, 1996, convened to discuss UCAR's acquisition of a supercomputer; documents concerning the briefing received by Under Secretary Eizenstat from Acting Assistant Secretary Robert LaRussa; and other documents relating to Commerce's position with respect to the UCAR acquisition or the antidumping investigation. (Pls.' Third Req. to the Dep't of Commerce for Prod. of Docs. at 4-5 (Jan. 2, 1997)). Plaintiffs also noticed depositions of Mr. Stuart Eizenstat, Under Secretary of Commerce for International Trade; Mr. Christian Marsh, Director of Accounting; Ms. Susan Esserman, Acting General Counsel for the Department of Commerce; Mr. Robert LaRussa, Acting Assistant Secretary for Import Administration; Mr. Gary Taverman, Director for Enforcement Group Two; and Mr. Paul Joffe, Deputy General Counsel. (Pls.' Notices of Deps. (Jan. 2, 1997)).

The Court ordered the parties to "work through" the question of deposing Mr. Eizenstat, Ms. Esserman and Mr. Joffe. The Court also ordered the parties to work through the question of...

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