992 F.Supp.2d 1315 (CIT 2014), 13-00104, Siemens Energy, Inc. v. United States

Docket Nº:13-00104
Citation:992 F.Supp.2d 1315
Opinion Judge:Barnett, Judge:
Party Name:SIEMENS ENERGY, INC., et al., Plaintiffs, v. UNITED STATES, Defendant, and WIND TOWER TRADE COALITION, Defendant-Intervenor
Attorney:No. 13-00104 Elliot J. Feldman, Baker Hostetler, of Washington, DC, argued for plaintiff Siemens Energy, Inc. With him on the brief was Michael S. Snarr. Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, argued for plaintiffs Titan Wind Energy (Suzhou) Co...
Judge Panel:Before: Mark A. Barnett, Judge.
Case Date:June 17, 2014
Court:Court of International Trade

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992 F.Supp.2d 1315 (CIT 2014)

SIEMENS ENERGY, INC., et al., Plaintiffs,

v.

UNITED STATES, Defendant, and WIND TOWER TRADE COALITION, Defendant-Intervenor

No. 13-00104

United States Court of International Trade

June 17, 2014

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Elliot J. Feldman, Baker Hostetler, of Washington, DC, argued for plaintiff Siemens Energy, Inc. With him on the brief was Michael S. Snarr.

Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of Washington, DC, argued for plaintiffs Titan Wind Energy (Suzhou) Co., Ltd., CS Wind Tech Co., Ltd., CS Wind Vietnam Co. Ltd., and Chengxi Shipyard Co., Ltd. With him on the brief were Bruce M. Mitchell, Max F. Schutzman, Andrew B. Schroth, Andrew T. Schutz, and Kavita Mohan.

Michael K. Haldenstein, Attorney, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, argued for defendant. With him on the brief were Dominic L. Bianchi, General Counsel, and Neal J. Reynolds, Assistant General Counsel for Litigation.

Daniel B. Pickard, Wiley Rein LLP, of Washington, DC, argued for defendant-intervenor. With him on the brief were Alan H. Price, Robert E. DeFrancesco, III, and Usha Neelakantan.

Before: Mark A. Barnett, Judge.

OPINION

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Barnett, Judge:

Plaintiffs, Siemens Energy, Inc. (" Siemens" ), Titan Wind Energy (Suzhou), CS

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Wind Tech, CS Wind Vietnam, and Chengxi Shipyard (collectively, " Titan" ), move, pursuant to USCIT R. 56.2, for judgment on the agency record, challenging the United States International Trade Commission's (" Commission" or " ITC" ) affirmative determination in the final injury investigations in antidumping and countervailing duty investigations concerning utility scale wind towers (" wind towers" ) from the People's Republic of China (" China" ) and in an antidumping investigation of wind towers from the Socialist Republic of Vietnam (" Vietnam" ) published in Utility Scale Wind Towers from China and Vietnam, 78 Fed. Reg. 10,210 (ITC Feb. 13, 2013) (" Final Determination " ), and the accompanying memorandum, Utility Scale Wind Towers from China and Vietnam, USITC Pub. 4372, Inv. Nos. 701-TA-486 and 731-TA-1195-1196 (Final) (Feb. 2013) (" Views of the Commission " or " Views " ).1 For the reasons stated below, the court denies Siemens' and Titan's motion.

BACKGROUND AND PROCEDURAL HISTORY

On December 29, 2011, the Wind Tower Trade Coalition 2 filed petitions with the United States Department of Commerce (" Commerce" ) and the Commission, seeking the imposition of antidumping and countervailing duties on wind towers imported from China and antidumping duties on wind towers from Vietnam. Commerce issued notices initiating investigations on January 24, 2012. See Utility Scale Wind Towers from the People's Republic of China and the Socialist Republic of Vietnam, 77 Fed. Reg. 3440 (Dep't Commerce Jan. 24, 2012) (initiation of antidumping duty investigations); Utility Scale Wind Towers from the People's Republic of China, 77 Fed. Reg. 3447 (Dep't Commerce Jan. 24, 2012) (initiation of countervailing duty investigation). Following a preliminary investigation, the Commission issued a preliminary determination on February 13, 2012, voting in a 5-0 decision that there was a reasonable indication that an industry in the United States was threatened with material injury by imports of wind towers from China and Vietnam. Utility Scale Wind Towers from China and Vietnam, 77 Fed. Reg. 9700 (ITC Feb. 17, 2012) (preliminary determination).

In the final investigation, the Commission relied on data from certified questionnaire responses from foreign producers of subject imports and from U.S. importers and domestic producers of the like product. The period of investigation (" POI" ) spanned 2009 through the first six months of 2012 (" interim 2012" ). Views at 9 n.30. Six domestic producers submitted questionnaire responses, accounting for the vast majority of U.S. shipments of wind towers during 2011.3 Five Chinese and two Vietnamese producers submitted questionnaire responses, providing data for almost all subject imports during the POI.4

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Eleven U.S. importers submitted questionnaire responses, representing over 95 percent of subject imports during the POI.5

Relying on this data, the Commission reached a divided final determination. Four Commissioners found " no material injury," and two Commissioners made affirmative determinations on the basis of " material injury." Three Commissioners found " no threat of material injury," and one made an affirmative determination on the basis of " threat of material injury." 6 Combined, the two affirmative determinations based on material injury, by Chairman Williamson and Commissioner Aranoff, and the one affirmative determination based on threat of material injury, by Commissioner Pinkert, resulted in a final affirmative determination that the domestic industry was materially injured or threatened with material injury by reason of Chinese and Vietnamese imports of wind towers.

The Commission defined wind towers as " large tubular steel towers that are part of wind turbines." Views at 6. It elaborated:

Wind turbines convert the mechanical energy of wind to electrical energy and are comprised of three main components -- the nacelle, rotor, and tower. The nacelle houses the wind turbine's main power generation components (the gearbox, generator, and other components), while the rotor typically consists of three blades and the hub. The nacelle sits on top of the wind tower. . . . [W]ind towers within the scope of these investigations are 50 meters or more in height and designed to support the nacelle and rotor blades in a wind turbine with a minimum rated electrical power generation capacity in excess of 100 kilowatts.7

Views at 6 (citing Staff Report at I-8 to I-9). Despite limited interchangeability between wind towers manufactured to different

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original equipment manufacturers' (" OEMs" ) specifications, the Commission found that wind towers within the scope of the investigation constituted a single domestic like product because they shared common physical characteristics and uses, channels of distribution, manufacturing facilities, production processes and employees, and producer and customer perceptions. Views at 7-8. The Commission further determined that subject imports compete with each other and the domestic like product. Views at 11-14.

Against this backdrop, two Commissioners made affirmative determinations that subject imports had materially injured the domestic industry. They found that the volume and increase in volume of Chinese and Vietnamese wind towers were significant in absolute terms and relative to domestic consumption and production. Views at 27-30. They further decided that these imports suppressed prices in the domestic market, despite the absence of underselling and price depression on a total delivered price basis. Views at 30-35. They thus determined that the subject imports' high volumes and price effects had an adverse impact on the domestic industry over the POI, and particularly during interim 2012. Views at 35-42. They concluded:

The increasing volumes of subject imports resulted in reduced growth in sales volumes and U.S. shipments and suppressed domestic price increases despite a robust growth in demand at the end of the period. Their effects have also included lower rates of capacity utilization, as well as declining market share and financial losses. . . .

[Therefore,] we conclude that there is a causal nexus between the subject imports and the poor performance of the domestic industry. Consequently, we find that the domestic industry is materially injured by reason of subject imports.

Views at 42.

A third Commissioner made an affirmative determination on the basis that the subject imports posed an imminent threat of material injury to the domestic wind tower industry. Weighing the statutory factors for finding threat, 19 U.S.C. § 1677(7)(F), he found, inter alia, that the subject imports competed in all major regions of the United States; Chinese and Vietnamese producers could accelerate production and delivery; subject import prices were trending downward; China had inventories of undelivered product; and subject import volume was significant and would likely increase significantly. Pinkert Views at 3-8. He found that demand for wind towers would soon moderate, such that " in the near future, it should take a much smaller volume of subject imports to constitute a significant share of the market than it took" during the POI. Pinkert Views at 6. He thus concluded that subject imports were likely to have an adverse impact on the domestic industry in the imminent future. Pinkert Views at 7-8. The two affirmative determinations based on material injury, combined with the third affirmative determination based on threat of material injury, resulted in a final affirmative injury determination.

Plaintiffs now challenge this Final Determination on several grounds. ( See generally Siemens Energy, Inc.'s Rule 56.2 Motion for Judgment on the Agency Record (" Siemens Mot." ); Memorandum of Law in Support of Plaintiffs' Rule 56.2 Motion for Judgment Upon the Agency Record (" Titan Mot." ).) First, Siemens argues that the court should not defer to the Commission's affirmative determination because the determination did not arise from a majority vote for either material injury or threat of material injury.

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(Siemens Mot. 14-18.) Second, Titan and Siemens contest the material injury determination, alleging that the Commission improperly found that (1) the volume of subject imports displaced a significant volume of domestic wind towers; (2) competition from subject imports suppressed domestic wind tower prices; and (3)...

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