Awp Indus. Inc. v. United States

• Decision Date: 12 July 2011
• Docket Number: Slip Op. 11–81.Court No. 10–00250.
• Citation: 783 F.Supp.2d 1266
• Parties: AWP INDUSTRIES, INC., ITC Manufacturing, Inc., J & L Wire Cloth, Inc., Nashville Wire Products Mfg. Co., Inc., Wireway Husky Corporation, Plaintiffs,v.UNITED STATES, Defendants,andDalian Eastfound Metal Products Co., Ltd., Dalian Eastfound Material Handling Products Co., Ltd., Worldwide Material Handling Products, LLC, Defendant–Intervenors.
• Court: U.S. Court of International Trade

783 F.Supp.2d 1266

AWP INDUSTRIES, INC., ITC Manufacturing, Inc., J & L Wire Cloth, Inc., Nashville Wire Products Mfg. Co., Inc., Wireway Husky Corporation, Plaintiffs,

v.UNITED STATES, Defendants,andDalian Eastfound Metal Products Co., Ltd., Dalian Eastfound Material Handling Products Co., Ltd., Worldwide Material Handling Products, LLC, Defendant–Intervenors.

Slip Op. 11–81.Court No. 10–00250.

United States Court of International Trade.

July 12, 2011.

Kelley Drye & Warren LLP (Kathleen W. Cannon and R. Alan Luberda), Washington, DC, for Plaintiffs.James M. Lyons, General Counsel, U.S. International Trade Commission; Andrea C. Casson, Assistant General Counsel for Litigation; (Charles A. St. Charles), Office of the General Counsel, for Defendant.DeKieffer & Horgan (Gregory S. Menegaz, Washington, DC, and Marc E. Montalbine), for Defendant–Intervenors.

OPINION

POGUE, Chief Judge:

In this action, Plaintiffs seek review of the International Trade Commission's (“the Commission”) finding of no material injury, or threat thereof, to the domestic industry, as a result of imports of wire decking from China. Plaintiffs challenge, as unsupported by substantial evidence in the record, the following five factual determinations (the “subsidiary findings”) relevant to the Commission's ultimate negative determination: 1) the Commission's choice of questionnaire response data to determine subject import market share; 2) the Commission's determination that subject imports were not suppressing domestic prices to a significant degree; 3) the Commission's conclusion that the domestic industry's declining performance was largely due to a decline in demand for wire decking; 4) the Commission's reliance on Chinese producer questionnaire responses in its determination regarding Chinese capacity; and 5) the Commission's determination that the largest importer of wire decking had ceased operations.

As explained below, the court concludes that the Commission's five subsidiary findings do not reflect an unreasonable reading or analysis of the record evidence regarding the economic conditions affecting the domestic industry during the Commission's 2006–2009 period of review. Accordingly, the Commission's decision is affirmed.

JURISDICTION

The court has jurisdiction over this case pursuant to 28 U.S.C. § 1581(c). ¹

BACKGROUND

The economic conditions affecting the domestic industry are, of course, the critical focus for a Commission's determination of whether a U.S. industry is being materially injured, or threatened with material injury, by reason of subject imports. See 19 U.S.C. § 1671d(b).² Specifically, in making its final determination, the Commission is required to consider the volume of subject imports, their effect on prices in the United States for the domestic like product, and the impact on domestic producers within the context of U.S. production, see 19 U.S.C. § 1677(7)(B). Additionally, in examining the impact of subject imports, the Commission “evaluate[s] all relevant economic factors which have a bearing on the state of the industry in the United States[.]” 19 U.S.C. § 1677(7)(C)(iii).³

The Commission's review of the economic conditions affecting the domestic industry covers the three-year period prior to the request or petition for an investigation (“POI”).⁴ The investigation at issue here was initiated on June 5, 2009, when AWP Industries, Inc. (“AWP”), ITC Manufacturing, Inc. (“ITC”), J & L Wire Cloth, Inc. (“J & L”), Nashville Wire Products Mfg. Co., Inc. (“Nashville Wire”) and Wireway Husky Corp. (“Wireway”), (collectively the “Domestic Industry,” “Petitioners,” or “Plaintiffs”), filed petitions with both the U.S. Department of Commerce (“Commerce”) and the Commission, alleging that the U.S. wire decking ⁵ industry was being materially injured or was threatened with material injury by reason of Chinese imports. The Domestic Industry also alleged that Chinese producers were selling their wire decking product at less than fair value (“LTFV”) while receiving subsidies from the Chinese government, thus causing material injury to the U.S. industry.⁶

Generally, to put the investigation in context, during this POI, from 2006–2009, “nonresidential construction activity slumped ..., w[ith] industrial production bottom[ing] out in mid–2009.” Final Views at 15. Thus, the Commission was faced with determining the effects of the subject imports in a generally declining economic environment that reduced demand. Nonetheless, during the preliminary investigation, the Commission found “a causal nexus between the subject imports and the deteriorating condition of the domestic industry.” Views of the Commission in the Preliminary Investigation 27 (CR 70) (PR 47) (“Prelim. Views”). In the final phase of its investigation, however, the Commission—after receiving questionnaire responses from foreign producers, domestic producers, importers and purchasers, in addition to evidence submitted by Petitioners—determined that the domestic industry was not being materially injured or threatened with material injury by reason of wire decking from China. Rather, to the Commission, the industry's difficulties were due to other economic factors or conditions.⁷

Notably, the Commission sent questionnaires to ten domestic wire decking producers identified by Petitioners, and received eight responses, seven of which provided usable information. Petitioners estimated that the seven usable responses accounted for approximately 99 percent of U.S. wire decking production in 2008. Confidential Staff Report for the Final Investigation III–1 n. 1 (June 17, 2010) (CR 180) (“Final Staff Report”). In addition, for the final phase of the investigation, the Commission sent questionnaires to thirty-six U.S. wire decking importers, and again received seven usable responses from firms reporting wire decking imports. The Commission stated that these responses were reported to account for “the majority” of imports during the relevant period. Final Views 3–4; see also Final Staff Report at IV–1. Further, the Commission received twenty-six purchaser responses and sent forty-eight final questionnaires to foreign producers believed to produce wire decking in China during the POI, receiving four responses.⁸ Final Staff Report at VII–2. The Commission believed that these responses accounted for the vast majority of Chinese production and exports to the U.S. in 2009. Final Views 4.⁹

After briefly summarizing the court's familiar standard of review, this decision will discuss each of the Commission's subsidiary findings that Plaintiffs challenge here.

STANDARD OF REVIEW

Where an action is brought under 19 U.S.C. § 1516a(a)(2) seeking review of a final determination of the Commission under 19 U.S.C. § 1673d, “[t]he court shall hold unlawful any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law[.]” 19 U.S.C. § 1516a(b)(1). The substantial evidence standard of review “can be translated roughly to mean ‘is [the determination] unreasonable?’ ” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed.Cir.2006) (alteration in original) (quoting SSIH Equip. S.A. v. U.S. Int'l Trade Comm'n, 718 F.2d 365, 381 (Fed.Cir.1983)), “tak[ing] into account whatever in the record fairly detracts from its weight.” Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

The Commission steps outside of its authority when:

[T]he agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.

Motor Vehicle Mfrs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2867, 77 L.Ed.2d 443 (1983).

DISCUSSION

I. Volume & Market Share

In considering the economic conditions facing the domestic industry, the Commission relied on data from importer questionnaire responses, finding that, while the volume of subject imports was significant both in absolute terms and as a share of apparent U.S. consumption, the subject imports' market share increase—less than two percentage points from 2006 to 2009—was not significant. Final Views 19–20; Def.'s Br. 13.¹⁰

Plaintiffs argue that the Commission's reliance on the data from those importers who submitted questionnaire responses and its failure to consider wire decking imported from non-responding companies, in order to determine import volumes and sales, was unreasonable when considered in light of the evidence in the entire record. Plaintiffs claim that the questionnaire responses that the Commission received from importers were insufficient as a data set and thus “understated and mischaracterized import volumes and market share trends.” Pl.'s Rule 56.2 Mem. of Law in Support of Mot. for J. on the Agency R. 12 (“Pl.'s Br.”).¹¹

Particularly, Plaintiffs assert that the questionnaire response data failed to account for a shift in marketing of subject imports, including the fact that those non- responding firms were the same new importers that had begun importing directly from China in 2008–2009. Pl.'s Br. 13; Pl.'s Reply Br. 2.

The Commission asserts that the questionnaire responses accounted for the largest importers and a majority of subject imports and that the questionnaire responses were certified on submission. Def.'s Br. 14. As the Commission found questionnaire data to be the most reliable, it credited this data set. Id.

Countering the Commission's claims, Plaintiffs provide data estimates for imports missing from the Commission's data set.¹² Plaintiffs state that, due to these omissions from key importers, the Commission's data set showed “declining volumes and a relatively steady import market share” as opposed to...