Bic Corp. v. U.S., Slip Op. 97-51.
| Decision Date | 24 April 1997 |
| Docket Number | Slip Op. 97-51.,Court No. 95-05-00726. |
| Citation | 964 F.Supp. 391 |
| Parties | BIC CORPORATION, Plaintiff, v. UNITED STATES of America, and the U.S. International Trade Commission, Defendants, and Thai Merry Co., Ltd., Defendant-Intervenor, and New York Lighter Co., Inc. and Polycity Industrial Ltd., Defendants-Intervenors. |
| Court | U.S. Court of International Trade |
Collier, Shannon, Rill & Scott (Paul C. Rosenthal, Robin H. Gilbert, Lynn E. Duffy, and Laura A. Svat), Washington, DC, for plaintiff.
Lyn M. Schlitt, General Counsel, James A. Toupin, Deputy General Counsel, Office of General Counsel United States International Trade Commission (Anjali K. Hansen, Shara L. Aranoff, and Rhonda M. Hughes), Washington, DC, for defendant.
Willkie Farr & Gallagher (Kenneth J. Pierce, Washington, DC, William B. Lindsey, Chevy Chase, MD, and Matthew R. Nicely, Washington, DC), for defendant-intervenor Thai Merry Co.
Pepper, Hamilton & Scheetz (Elliot J. Feldman, Washington, DC, and John J. Burke), for defendants-intervenors New York Lighter Co.; and Polycity Industrial Ltd.
This matter is before the Court on plaintiff's motion for judgment on the agency record and request for remand. Plaintiff, BIC Corporation, Milford Connecticut, ("BIC"), challenges the United States International Trade Commission's ("Commission") final negative material injury determinations with respect to certain disposable lighters from Thailand and the People's Republic of China ("China"). Disposable Lighters from Thailand, USITC Pub. No. 2876, Inv. No. 731-TA-701 (Apr.1995) (final negative determination), 60 Fed.Reg. 21,007 (1995) ("Thai Lighters"); and Disposable Lighters from the People's Republic of China, USITC Pub. No. 2896, Inv. No. 731-TA-700 (June 1995) (final negative determination), 60 Fed.Reg. 32,338 (1995) ("Chinese Lighters"). The Court exercises jurisdiction under 28 U.S.C. § 1581(c) (1994), and affirms the Commission's final determinations.
On May 9, 1994, BIC, the sole domestic producer of disposable lighters, filed a petition with the Commission and Commerce alleging that the United States's ("U.S.") disposable lighter industry was materially injured, or threatened with material injury, by reason of subsidized and less than fair value ("LTFV") imports of disposable pocket lighters from Thailand, and LTFV imports of disposable lighters from China. Disposable Lighters from the People's Republic of China and Thailand, 59 Fed.Reg. 25,502 (1994). Thai Lighters at I-8.
In April 1995, the ITC reached a final negative determination with respect to disposable lighters from Thailand. Thai Lighters. Two months later, the Commission reached a final negative determination with respect to disposable lighters from China. Chinese Lighters.
The Commission's determination in Chinese Lighters parallels its determination in Thai Lighters. That is, in Chinese Lighters, the Commission adopted and incorporated by reference the conditions of competition and the discussion of the domestic industry contained in Thai Lighters.1 Chinese Lighters at I-7, I-9. The only significant difference involves cumulation. In Thai Lighters, the Commission analyzed material injury cumulating imports from both Thailand and China. Thai Lighters at I-11-I-13. In contrast, a majority of the Commission in Chinese Lighters decided not to cumulate imports from China with imports from Thailand because it found that the Thai imports were no longer subject to investigation. Chinese Lighters at I-7, I-11.
In both determinations, the Commission found one like product, consisting of both standard and child-resistant disposable lighters. Thai Lighters at I-6.
The Commission then examined the state of the domestic industry. It began by identifying two conditions of competition which provided the context for its assessment of the economic health of the domestic disposable lighter industry. The first condition of competition was a new regulation promulgated by the Consumer Product Safety Commission ("CPSC"), banning both the manufacture or importation of non-child-resistant lighters ("standard lighters") after July 12, 1994. Id. at I-9. The Commission determined that the ban forced the industry to undergo a "fundamental" structural change, affecting the investigation in three ways: first, it forced many suppliers to exit the U.S. market because they could not supply disposable lighters that complied with the CPSC regulation; second, it led to the buildup of U.S. inventories of domestic and imported standard lighters; and third, it complicated the use of 1994 market data. Id.
The second condition of competition involved a finding that the disposable lighter market consists of two primary market segments, one containing "higher-priced, higher-quality, brand name disposable lighters," and the other containing "lower-priced, lower-quality private label brands." Id. The Commission further found that BIC's lighters were sold in the higher-quality segment, while the subject imports were sold in the lower-quality segment. Id.
Against this backdrop, the Commission then discussed the state of the domestic industry. The Commission found that between 1991 and 1994, the cumulated volume of subject imports increased, and BIC's market share by quantity decreased slightly. Thai Lighters at I-14-I-15. Importantly, the Commission also found that any negative inferences this data might raise were offset by increased domestic consumption of lighters during the same period. Id. Moreover, when it measured market share by value, the Commission found that BIC's market share actually increased from 1992 to 1994. Id. at I-15. Additionally, in the post-CPSC ban period, the Commission found that BIC's market share increased whether measured by quantity or value. Id.
The Commission then found that the two products competed on factors other than price. Id. at I-15-I-16. Consequently, the Commission concluded that "[t]he domestic industry retained a relatively stable share (by value) of a growing market, and was profitable throughout most of the period of investigation, even though domestic production decreased." Thai Lighters at I-17 (footnotes omitted). As a result, the Commission unanimously determined that the domestic industry was not experiencing material injury by reason of the LTFV imports from Thailand and China.
The Commission then turned to the question of whether the subject imports threatened the domestic industry with material injury. A majority of the Commission first concluded that after the CPSC ban, "only the Thai and Chinese existing and future capacity to produce child-resistant lighters [would be] evidence of any threat of material injury to the domestic industry." Id. at I-20. It then found that, as a percentage of total capacity, the Thai and Chinese producers' capacity to produce child-resistant lighters was too small to pose a threat to BIC. Id. at I-20-I-21.
The majority further found that the administrative record did not contain any evidence indicating that the Thai and Chinese producers were "preparing to abandon [] other markets, which consume standard lighters, in order to ship more child-resistant lighters to the United States." Id. at I-21. As a result, the majority concluded that there was no evidence "that any threat of material injury [was] real or that actual injury [was] imminent."2 Id.
The Court will uphold the Commission's determination unless it finds that it is "unsupported by substantial evidence on the record, or not otherwise in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1994). Substantial evidence is Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951) (citations omitted).
To make this assessment, the Court reviews "all information presented to or obtained by the ... Commission during the course of the administrative proceeding...." 19 U.S.C. § 1516a(b)(2)(A)(I). Importantly, the Court may not remand the Commission's determination simply because the evidence on the record may support two inconsistent conclusions. Consolo v. Federal Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 1026-27, 16 L.Ed.2d 131 (1966); Matsushita Elec. Indus. Co. v. United States, 3 Fed. Cir. (T) 44, 54, 750 F.2d 927, 936 (1984); accord, Mitsubishi Materials Corp. v. United States, 20 CIT ___, ___ - ___, 918 F.Supp. 422, 424-25 (1996). Rather, the choice between two possible conclusions is properly the task of the Commission, and not the court. Bando Chemical Indus. v. United States, 17 CIT 798, 802-03 (1993), aff'd, 26 F.3d 139 (Fed. Cir.1994); Acciai Speciali Terni S.p.A. v. United States, 19 CIT ___, ___, Slip Op. 95-142 at 8-9, 1995 WL 476719 (Aug. 7, 1995). Thus, the Court affirms agency factual determinations so long as they are reasonable and supported by the record when considered as a whole, even though there may be evidence on the record which detracts from the agency's conclusions. Atlantic Sugar, Ltd. v. United States, 2 Fed. Cir. (T) 130, 137-38, 744 F.2d 1556, 1563 (1984).
BIC challenges the Commission's negative current injury determinations and negative threat determinations in both Thai Lighters and Chinese Lighters. With respect to the current injury determinations, BIC argues that the Commission's causation analysis is not in accordance with law because it is internally inconsistent and it is unsupported by substantial evidence on the record. BIC further asserts that the Commission ignored evidence of underselling, overstated the impact of the CPSC ban, and relied on flawed and unrepresentative data.
With respect to the threat determinations, BIC argues that the majority of the Commission ignored...
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