Ceramica Regiomontana, SA v. US, Court No. 89-06-00323. Slip Op. 94-74.
| Decision Date | 05 May 1994 |
| Docket Number | Court No. 89-06-00323. Slip Op. 94-74. |
| Citation | 853 F. Supp. 431 |
| Parties | CERAMICA REGIOMONTANA, S.A., Ceramicas Y Pisos Industriales de Culiacan, S.A. de C.V., and Industrias Intercontinental, S.A., Plaintiffs, v. The UNITED STATES, Defendant. |
| Court | U.S. Court of International Trade |
Ross & Hardies (Steven P. Kersner), Washington, DC, for plaintiffs.
Frank W. Hunger, Asst. Atty. Gen.; David M. Cohen, Director, Commercial Litigation Branch, Civ.Div., U.S. Dept. of Justice (Velta A. Melnbrencis), of counsel: Thomas H. Fine, Import Admin., U.S. Dept. of Commerce, Washington, DC, for defendant.
Plaintiffs Ceramica Regiomontana ("Ceramica") Ceramicas Y Pisos Industriales de Caliacan, S.A. de C.V. ("Caliacan") and Industrias Intercontinental ("Intercontinental") challenge the final results of an administrative review of countervailing findings announced by the International Trade Administration, U.S. Department of Commerce ("ITA" the "Department" or "Commerce"): Ceramic Tile From Mexico; Final Results of Countervailing Duty Administrative Review, 54 Fed.Reg. 19,930 (May 9, 1989). The review covers shipments imported during the period January 1, 1986 to December 31, 1986.
On May 10, 1982, Commerce published an countervailing duty order on ceramic tile from Mexico. Final Affirmative Countervailing Duty Determination; Ceramic Tile From Mexico and Countervailing Duty Order, 47 Fed.Reg. 20,012 (May 10, 1982). The countervailing duty order was issued under the authority of 19 U.S.C. § 1303(a)(1), absent a material injury determination by Commerce, as Mexico was not at that time a "country under the Agreement" within the meaning of 19 U.S.C. § 1671(b).
On April 23, 1985, Mexico and the United States signed the Understanding between the United States and Mexico Regarding Subsidies and Countervailing Duties ("Understanding"). Paragraph 14 of the Understanding required the designation of Mexico as a "country under the Agreement." Accordingly, on April 30, 1985, the Office of the United States Trade Representative published a notice stating that, in accordance with 19 U.S.C. § 1671(b), as of April 23, 1985, Mexico was a "country under the Agreement." Determination Regarding the Application of Certain International Agreements, 50 Fed.Reg. 18,335, 18,335-36 (1985).
On June 29, 1988, Commerce initiated an administrative review of the countervailing duty order on ceramic tile from Mexico, covering the period January 1 through December 31, 1986. Initiation of Antidumping and Countervailing Duty Reviews, 53 Fed. Reg. 24,470 (June 29, 1988).
On December 9, 1988, Commerce published a notice of its preliminary results of the administrative review. Ceramic Tile From Mexico; Preliminary Results of Countervailing Duty Administrative Review, 53 Fed.Reg. 49,718 (Dec. 9, 1988). For the 1986 calendar year, Commerce found thirty-six zero rate or de minimis firms and a 4.28 percent ad valorem for all other firms.
Plaintiffs' original complaint was amended by motion to two counts. Ceramica Regiomontana, S.A. et al. v. United States, ___ CIT ___, Slip Op. No. 90-109, 1990 WL 160258 (October 17, 1990). Count One alleges that Commerce cannot impose countervailing duties on merchandise imported from Mexico after April 23, 1985, the date that Mexico became a "country under the Agreement" within the meaning of 19 U.S.C. § 1671, without a determination by Commerce that the imports of such merchandise materially injure or threaten to materially injure a United States industry producing a like product. Because no injury determination covering plaintiffs' ceramic tile imports has been made, plaintiffs argue the antidumping duties imposed after April 23, 1985 are unauthorized.
Count Two alleges that Commerce improperly excluded companies receiving zero or de minimis benefits from its calculation of the country-wide countervailing duty rate under Ipsco, Inc. v. United States, 899 F.2d 1192 (Fed.Cir.1990). The appellate court in Ipsco held that in calculating the country-wide subsidy rate, Commerce should include companies with zero and de minimis subsidy rates.
In reviewing injury, antidumping, and countervailing duty investigations and determinations, this Court must hold unlawful any determination unsupported by substantial evidence on the record or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1988). Substantial evidence "means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. Labor Board, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)). Moreover, the Court may not substitute its judgment for that of the agency when the choice is between two fairly conflicting views, even though the Court would justifiably have made a different choice had the matter been before it de novo. See American Spring Wire Corp. v. United States, 8 CIT 20, 22, 590 F.Supp. 1273, 1276 (1984) (citing Universal Camera, 340 U.S. at 488, 71 S.Ct. at 465-66), aff'd. sub nom., Armco, Inc. v. United States, 760 F.2d 249 (Fed.Cir.1985).
Substantial evidence supporting an agency determination must be based on the whole record. See Universal Camera Corp., 340 U.S. 474, 488, 71 S.Ct. 456, 465-66, 95 L.Ed. 456 (1951). The "whole record" means that the Court must consider both sides of the record. It is not sufficient to examine merely the evidence that sustains the agency's conclusion. Id. In other words, it is not enough that the evidence supporting the agency decision is "substantial" when considered by itself. The substantiality of evidence must take into account whatever in the record fairly detracts from its weight. Universal Camera Corp., 340 U.S. at 478, 488, 71 S.Ct. at 459-60, 465-66.
At the time of the establishment of the GATT in 1947, the United States countervailing duty law, under § 303 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1303, only applied to dutiable items and did not provide for an injury determination. Therefore, under the "grandfather clause" of the GATT, the United States was under no obligation to apply paragraph 6(a) of the GATT, which was inconsistent with U.S. trade law. Paragraph 6(a) of the GATT stated:
6. (a) No contracting party shall levy any antidumping or countervailing duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping or subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry.
GATT, 61 Stat. All, T.I.A.S. No. 1700, 55 U.N.T.S. 184 (1947).
In 1974, Congress passed the Trade Act of 1974, which, inter alia, amended 19 U.S.C. § 1303, expanding the countervailing duty law to cover non-dutiable as well as dutiable items. Section 1303 originally contained the old law that allowed countervailing duties to be assessed on dutiable items. The 1974 amendment added, inter alia, subsection (a)(2) which provided as follows:
(2) In the case of any imported article or merchandise which is free of duty, duties may be imposed under this section only if there is an affirmative determination by the Commission under subsection (b)(1) of this section; except that such a determination shall not be required unless a determination of injury is required by the international obligations of the United States.
19 U.S.C. § 1303(a)(2) (1976).
Therefore, following the enactment of the Trade Act of 1974, injury determination by Commerce were required as condition precedent to imposing countervailing duties on subsidized nondutiable goods only if required by international obligations (i.e., the GATT). An injury determination was still not required for dutiable goods.
In 1979, Congress enacted the Trade Agreements Act of 1979, Pub.L. 96-39, 93 Stat. 144, which added a new title to the Tariff Act of 1930, Title VII: Countervailing and Antidumping Duties, 19 U.S.C. §§ 1671 through 1677g. The Trade Agreements Act was the implementing legislation for the Subsidies/Countervailing Measures Agreement ("Subsidies Code"), signed by the GATT members, stemming from the Tokyo Round of trade negotiations of the GATT. Section 101 of the Trade Agreements Act added § 701 to the Tariff Act of 1930, 19 U.S.C. § 1671, which replaced the countervailing duty law under 19 U.S.C. § 1303, as applied to exports from a "country under the Agreement." The term "under the Agreement" refers to the obligations found in the Subsidies Code of the GATT. Section 1671 provides as follows:
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