Bratsk Aluminium Smelter v. U.S.

• Decision Date: 10 April 2006
• Docket Number: No. 05-1213.,05-1213.
• Citation: 444 F.3d 1369
• Parties: BRATSK ALUMINIUM SMELTER, Rual Trade Limited, and General Electric Silicones LLC, Plaintiffs, and Sual Holding and Zao Kremny, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee, and Globe Metallurgical Inc. and Simcala, Inc., Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

444 F.3d 1369

BRATSK ALUMINIUM SMELTER, Rual Trade Limited, and General Electric Silicones LLC, Plaintiffs, and Sual Holding and Zao Kremny, Plaintiffs-Appellants, v. UNITED STATES, Defendant-Appellee, and Globe Metallurgical Inc. and Simcala, Inc., Defendants-Appellees.

No. 05-1213.

United States Court of Appeals, Federal Circuit.

April 10, 2006.

Frederick P. Waite, Vorys, Sater, Seymour and Pease LLP, of Washington, DC, argued for plaintiffs-appellants. With him on the brief was Kimberly R. Young.

June B. Brown, Attorney, Office of General Counsel, United States International Trade Commission, of Washington, DC, argued for defendant-appellee United States. On the brief were James M. Lyons, General Counsel, Andrea C. Casson, Acting Assistant General Counsel, and Irene H. Chen, Attorney.

William D. Kramer, DLA Piper Rudnick Gray Cary U.S. LLP, of Washington, DC, argued for defendants-appellees Globe Metallurgical Inc. and Simcala, Inc. With him on the brief was Clifford E. Stevens, Jr. Of counsel was Martin Schaefermeier.

Before GAJARSA, Circuit Judge, ARCHER, Senior Circuit Judge, and DYK, Circuit Judge.

Opinion for the court filed by Circuit Judge DYK. Dissenting opinion filed by Senior Circuit Judge ARCHER.

DYK, Circuit Judge.

SUAL Holding and ZAO Kremny (collectively "appellants") appeal from the judgment of the United States Court of International Trade affirming the International Trade Commission's ("Commission") determination that domestic industry was materially injured by reason of silicon metal imports from Russia that were sold at less than fair market value ("LTFV"). We vacate the Court of International Trade's decision and remand for further proceedings.

BACKGROUND

In antidumping proceedings, the Commission is charged with determining whether an industry in the United States has suffered, or is threatened with, material injury by reason of imports. 19 U.S.C. § 1673d(b) (2000). Material injury determinations are particularly difficult where the imports sold at LTFV compete with identical imports not sold at LTFV.

The product involved here is silicon metal. Silicon metal is a commodity product, meaning that it is generally interchangeable regardless of its source. Therefore, price is the primary consideration for purchasers of silicon metal. The market for silicon metal consists of three segments: chemical, primary aluminum, and secondary aluminum. During the pertinent time period there were ten countries, other than the United States, which supplied silicon metal to the U.S. market: Argentina, Brazil, Canada, China, Korea, Norway, Russia, Saudi Arabia, South Africa, and Spain.

On March 7, 2002, Globe Metallurgical Inc., SIMCALA Inc., and several union groups filed an antidumping petition with the Commission and with the United States Department of Commerce ("Commerce"), alleging that Russian imports of silicon metal at LTFV had materially injured the domestic industry. On February 11, 2003, Commerce rendered its final determination that the subject imports were, or were likely to be, sold at LTFV. On March 24, 2003, the Commission determined that the domestic industry was materially injured by reason of the subject imports.

The Commission relied on market data over a three-year period, 1999-2001, as well as data for specific periods between January-September 2001 and 2002, and, as required by the statute, considered subject import volume, the effect of subject imports on domestic prices, and the impact of subject imports on domestic producers. 19 U.S.C. § 1677(7)(B)(i), (C) (2000). First, the Commission found that subject import volume was significant and that subject import volume increased from 1999 to 2001, while domestic producers lost market share. The Commission also noted, however, that the domestic industry was able to satisfy only a portion of U.S. silicon metal demand.

The Commission next considered what effect subject imports had on domestic prices. The Commission noted that "price is very important in purchasing decisions, given the commodity-like nature of the subject product." Using purchaser price data, the Commission found that during the period of investigation, subject imports almost always undersold the domestic product in all three market segments. In response to the argument that all imports, not just subject imports, undersold the domestic product, the Commission stated that "price data for nonsubject imports shows that imports from Russia have been priced at lower levels than nonsubject imports," and concluded that "[i]n light of subject imports' increasing volumes and their significant underselling of, and high substitutability with, both domestic and nonsubject silicon metal, we find significant price depression by the subject imports." The Commission further noted:

We recognize that nonsubject imports may have had an independent price depressive effect on domestic silicon metal prices. However, given the significant underselling by subject imports, subject import volume surges during the POI, and the high degree of substitutability between subject imports and the domestic product, we find that subject imports themselves have significantly depressed domestic silicon metal prices in all three customer segments ....

Finally, the Commission turned to the impact of subject imports on domestic producers and concluded that, given the significant volume and price effects of the subject imports, subject imports had a significant adverse effect on the domestic industry. The Commission considered the domestic industry's drop in market share, as well as the fact that certain silicon metal furnaces had been closed or converted for other uses. The Commission "acknowledge[d] that domestic industry lost market share to nonsubject imports as well," but concluded that "[r]egardless of the impact of nonsubject imports on the domestic industry, we find, in this investigation, that the surges in subject import volume at prices that undersold and depressed domestic silicon metal prices to a significant degree during the POI had a material adverse impact on the domestic industry."

Appellants¹ argued that our decision in Gerald Metals, Inc. v. United States, 132 F.3d 716 (Fed.Cir.1997) required a specific determination as to whether the non-subject imports would simply replace the subject imports, with the same impact on domestic products, if the subject imports were excluded from the market. The Commission made no such determination and dismissed our decision in Gerald Metals as being factually distinguishable.

Appellants challenged several aspects of the Commission's determination in the Court of International Trade, including whether the Russian imports actually caused injury to the domestic industry. The court made no ruling with respect to the causation issue but remanded the case to the Commission on an unrelated issue. The court noted that it would "consider the remaining issues raised by Plaintiffs upon review of the remand determination." Bratsk Aluminum Smelter v. United States, No. 03-00200, 2004 WL 1385848, at *11 (Ct. Int'l Trade June 22, 2004). On remand, the Commission incorporated its initial decision by reference and then clarified some of its findings. On December 3, 2004, the Court of International Trade affirmed the Commission's remand determination "in its entirety" and dismissed the case, stating that "all other issues have been decided ...." SUAL Holding and ZAO Kremny timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(5).

DISCUSSION

The sole point of contention in this appeal is whether the Commission established that the injury to the domestic industry was "by reason of" the subject imports.²

I

The antidumping statute states that the "Commission shall make a final determination of whether ... an industry in the United States ... is materially injured..... by reason of imports ...." 19 U.S.C. § 1673d(b) (2000). In making this determination, the Commission must consider:

(I) the volume of imports of the subject merchandise,

(II) the effect of imports of that merchandise on prices in the United States for domestic like products, and

(III) the impact of imports of such merchandise on domestic producers of domestic like products, but only in the context of production operations within the United States ....

19 U.S.C. § 1677(7)(B)(i) (2000). "An affirmative injury determination requires both (1) present material injury and (2) a finding that the material injury is `by reason of' the subject imports." Gerald Metals, Inc., 132 F.3d at 719 (emphasis added). We have previously explained that the "by reason of" requirement "mandates a showing of causal—not merely temporal—connection between the LTFV goods and the material injury." Id. at 720. We have not required the Commission to employ any particular methodology for determining whether this causation element has been met,<sup>3</sup> and the "Commission need not isolate the injury caused by other factors from injury caused by unfair imports...." Taiwan Semiconductors Industry Ass'n v. Int'l Trade Comm'n, 266 F.3d 1339, 1345 (Fed.Cir.2001) (quoting legislative history of the Uruguay Round Agreements Act); see also Nippon Steel Corp. v. Int'l Trade Comm'n, 345 F.3d 1379, 1381 (Fed.Cir.2003) ("`[D]umping' need not be the sole or principal cause of injury."). However, we have made clear that causation is not shown if the subject imports contributed only "minimally or tangentially to the material harm." Gerald Metals, 132 F.3d at 722; see also Nippon Steel Corp., 345 F.3d at 1381; U.S. Steel Group v. United States, 96 F.3d 1352, 1361-62 (Fed. Cir.1996).

The Commission, like other federal agencies, "must examine the relevant data and articulate a satisfactory explanation for its action .... Normally, an agency rule would be arbitrary and capricious if the agency ... entirely fail[s] to consider an important aspect of the problem." Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S....