Bethlehem Steel Corp. v. U.S., 00-00151, Slip Op. 03-143.
| Decision Date | 28 October 2003 |
| Docket Number | No. 00-00151, Slip Op. 03-143.,00-00151, Slip Op. 03-143. |
| Citation | 294 F.Supp.2d 1359 |
| Parties | BETHLEHEM STEEL CORPORATION, Ispat Inland Inc., LTV Steel Company, Inc., United States Steel, LLC, and National Steel Corporation, Plaintiffs, v. UNITED STATES, Defendant, and Usinas Siderurgicas De Minas Gerais S/A, Companhia Siderurgica Paulista, Companhia Siderurgica Nacional, Thai Cold Rolled Steel Sheet Public Company Limited, Iscor, Ltd., Nippon Steel Corporation, NKK Corporation, Kawasaki Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd., Nisshin Steel Company, Ltd., Eregli Demir ve Celik FAB. T.A.S., and Shanghai Baosteel Group Corporation, Defendant-Intervenors. |
| Court | U.S. Court of International Trade |
Willkie Farr & Gallagher, LLP (William H. Baringer), for Defendant-Intervenors Thai Cold Rolled Steel Sheet Public Company Limited, Usinas Siderurgicas de Minas Gerais S/A, Companhia Siderurgica Paulista, and Companhia Siderurgica Nacional.
O'Melveny & Myers, LLP (Kristin Heim Mowry), Washington, DC, for Defendant-Intervenor Iscor, Ltd.
Willkie Farr & Gallagher, LLP (Matthew Robert Nicely, James P. Durling, and Jocelyn C. Flynn), Washington, DC, for Defendant-Intervenors Nippon Steel Corporation, NKK Corporation, Kawasaki Steel Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd., and Nisshin Steel Company, Ltd.
Law Offices of David L. Simon (David L. Simon), Washington, DC, for Defendant-Intervenor Eregli Demir ve Celik Fab. T.A.S.
Dorsey & Whitney, LLP (Philippe M. Bruno), Washington, DC, for Defendant-Intervenor Shanghai Baosteel Group Corporation.
This case concerns the final negative injury determinations of the International Trade Commission ("ITC") in several antidumping ("AD") and countervailing duty ("CVD") proceedings involving cold-rolled steel ("CRS") products from Argentina, Brazil, China, Indonesia, Japan, Russia, Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela (collectively, the "Final Determinations").
The Plaintiffs are a group of domestic steel producers: Bethlehem Steel Corporation; Ispat Inland Inc.; LTV Steel Company, Inc.; United States Steel, LLC; and National Steel Corporation. Neither Ispat nor National Steel are plaintiffs with respect to the investigation involving Japan.
The Defendant is the ITC. The Defendant-Intervenors are a group of foreign steel producers: Usinas Siderurgicas de Minas Gerais S/A; Companhia Siderurgica Paulista; Companhia Siderurgica Nacional; Thai Cold Rolled Steel Sheet Public Company Limited; Iscor, Ltd.; Nippon Steel Corporation; NKK Corporation; Kawasaki Steel Corporation; Sumitomo Metal Industries, Ltd.; Kobe Steel, Ltd.; Nisshin Steel Company, Ltd.; Eregli Demir ve Celik Fab. T.A.S.; and Shanghai Baosteel Group Corporation.
On June 2, 1999, certain domestic producers of CRS products, including the Plaintiffs, filed AD and CVD petitions with the Department of Commerce and the ITC. On July 30, 1999, the ITC published its preliminary determination. The ITC determined that there was a reasonable indication that the domestic industry was injured, or threatened with material injury, by CRS imports sold at less than fair value from Argentina, Brazil, China, Indonesia, Japan, Russia, Slovakia, South Africa, Taiwan, Thailand, Turkey, and Venezuela, as well as by subsidized imports from Brazil. The ITC terminated the CVD investigations with respect to Indonesia, Thailand, and Venezuela.
On December 1, 1999, the ITC began the final phase of its investigations. On January 20, 2000, the ITC held a public hearing. The parties filed pre- and post-hearing briefs shortly before and after this hearing. On February 18, 2000, the ITC filed its Final Staff Report. One week later, on February 25, 2000, the ITC made available to the parties all information on which they had not yet had an opportunity to comment, and allowed the parties until February 29, 2000, to submit final comments on this information.
On March 14, 2000, the ITC found by a 5-1 vote that the domestic industry was not materially injured, or threatened with material injury, by reason of allegedly subsidized CRS imports from Brazil, or by reason of allegedly dumped CRS imports from Argentina, Brazil, Japan, Russia, South Africa, or Thailand. See Certain Cold-Rolled Steel Products From Argentina, Brazil, Japan, Russia, South Africa, and Thailand, 65 Fed.Reg. 15,008, USITC Pub. 3283 (Mar. 20, 2000) ("March Determination"). Similar negative determinations were subsequently published on May 17, 2000 with respect to allegedly dumped CRS imports from Turkey and Venezuela, and on July 17, 2000 with respect to allegedly dumped CRS imports from China, Indonesia, Slovakia, and Taiwan. See Certain Cold-Rolled Steel Products From Turkey and Venezuela, 65 Fed.Reg. 31,348 (May 17, 2000); Certain Cold-Rolled Steel Products From China, Indonesia, Slovakia, and Taiwan, 65 Fed.Reg. 44,076 (July 17, 2000). The analysis contained in the March Determination was adopted in both subsequent determinations.
After defining the domestic like product and the industry, and deciding to cumulate the imports from all of the subject countries, the ITC began the final phase of its antidumping and countervailing duty investigation. In the final phase, the ITC must determine whether the domestic industry is materially injured by reason of the subject imports. See 19 U.S.C. §§ 1671d(b), 1673d(b). To make this determination, the ITC must consider all relevant economic factors within the context "of the business cycle and conditions of competition" of the domestic industry. 19 U.S.C. § 1677(7)(C)(iii). In determining that there was no material injury to the domestic CRS industry, the ITC analyzed the conditions of competition. As part of that analysis, the ITC looked to whether the captive production provision applied. March Determination at 15-18. If the captive production provision was applicable, then the ITC would "focus primarily on the merchant market for the domestic like product" to determine "market share and the factors affecting financial performance." 19 U.S.C. § 1677(7)(C)(iv).
The ITC concluded that the threshold requirements of the captive production provision were met — namely, that "domestic producers internally transfer[red] a significant share of their domestic production for captive consumption and [sold] a significant share on the merchant market." March Determination at 16. The ITC also found that the first two prongs of the captive production provision were met. Id. However, the ITC concluded that the third prong (that "the production of the domestic like product sold in the merchant market is not generally used in the production of that downstream article") was not met. Id. Therefore, the ITC did not apply the captive production provision. Id. at 18. Nevertheless, the ITC decided to consider captive production as a condition of competition because there was a significant volume of captive production. Id.
This appeal followed. The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c).
Under the applicable standard of review, the ITC's determinations must be upheld unless they are not supported by substantial evidence or otherwise not in accordance with law. The ITC's determinations are presumed to be correct; the burden is on the party challenging a determination to demonstrate otherwise. See 28 U.S.C. § 2639(a)(1); Trent Tube Div. v. United States, 752 F.Supp. 468, 14 CIT 780, 784 (1990).
The Plaintiffs challenge three aspects of the ITC's investigation. First, the Plaintiffs allege that the ITC improperly found that the captive production provision of 19 U.S.C. § 1677(7)(C)(iv) was inapplicable to the Final Determinations. See Mem. Supp. Rule 56.2 Mot. of Bethlehem, Ispat, LTV, & U.S. Steel at 17-43. Second, Plaintiffs argue that the ITC improperly relied on information upon which the parties were not given an opportunity to comment. See id. at 44-48. Third, Plaintiffs charge that the ITC's findings concerning certain conditions of competition, and the volume and price effects of CRS imports, were not supported by substantial evidence and otherwise in accordance with law. See Mem. Supp. Mot. J. Agency R. Under Rule 56.2 of Bethlehem, LTV, National Steel, & U.S. Steel at 10-45.
As a general rule, the ITC considers the domestic industry as a whole in determining whether subject imports have caused material injury. See 19 U.S.C. § 1673d(b)(1)(A)(i) (2000). However, there is a narrow exception to this rule, commonly called the "captive production" provision, which provides that if certain conditions are met, the ITC must "focus primarily on the merchant market for the domestic like product" when determining market share and the economic factors impacting the affected domestic industry. See 19 U.S.C. § 1677(7)(C)(iv) (2000). The captive production statute reads in pertinent part as follows:
(iv) Captive production
If domestic producers internally transfer significant production of the domestic like product for the production of a downstream article and sell significant production of the domestic like product in the merchant market, and the [ITC] finds that—
. . . . .
(III) the production of the domestic like product sold in the merchant market is not generally used in the production of that downstream article,
then the [ITC], in determining market share and the [economic factors impacting the affected domestic industry], shall focus primarily on the merchant market for the...
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