Chaparral Steel Co. v. U.S.

• Decision Date: 17 April 1990
• Docket Number: 88-1339,Nos. 89-1338,s. 89-1338
• Citation: 901 F.2d 1097
• Parties: CHAPARRAL STEEL COMPANY, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant, and Norsk Jernverk A.S., Defendant-Appellant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1097

901 F.2d 1097

12 ITRD 1154

CHAPARRAL STEEL COMPANY, Plaintiff-Appellee, v. The UNITED STATES, Defendant-Appellant, and Norsk Jernverk A.S., Defendant-Appellant.

Nos. 89-1338, 88-1339.

United States Court of Appeals, Federal Circuit.

April 17, 1990.

Suggestion for Rehearing In Banc Declined May 29, 1990.

Stephen McLaughlin, U.S. Intern. Trade Com'n, Washington, D.C., argued for defendant-appellant, The U.S.

Arnold Podgorsky, Gerst, Heffner, Carpenter & Podgorsky, Washington, D.C., argued for defendant-appellant, Norsk Jernverk A.S. With him on the brief were Mary Todd Carpenter and Carrie L. Bumgarner. Also on the brief was Frederick P. Waite, Davis, Graham & Stubbs, Washington, D.C.

Charles O. Verrill, Jr., Wiley, Rein & Fielding, Washington, D.C., argued for plaintiff-appellee. With him on the brief were John A. Hodges and Eileen P. Bradner; Alan H. Price, Wiley, Rein & Fielding, Washington, D.C., of counsel.

Before NIES, NEWMAN and MICHEL, Circuit Judges.

MICHEL, Circuit Judge.

This is an interlocutory appeal from a September 28, 1988 order of the United States Court of International Trade, 698 F.Supp. 254 (Ct.Int'l Trade 1988), remanding a negative injury determination made in 1985 and directing the United States International Trade Commission (ITC) to cumulate certain imports from Poland, Spain, and South Africa with imports from Norway in the ITC's investigation, Carbon Steel Structural Shapes from Norway, USITC Pub. 1785, Inv. No. 731-TA-234 (Nov. 1985) (final). The trial court certified its order for immediate appeal, Chaparral Steel Co. v. United States, Court No. 85-12-01767 (Ct.Int'l Trade Dec. 22, 1988) (order), and this court accepted the appeal. Chaparral Steel, Misc. Nos. 231 & 232 (Fed.Cir. Feb. 2, 1989) (order). We conclude that the Court of International Trade erred in rejecting the ITC's interpretation of the statutory requirements for cumulation, and accordingly we reverse.

BACKGROUND

Chaparral Steel Company (Chaparral), a United States producer, filed a petition for imposition of antidumping duties with the ITC and the International Trade Administration (ITA) on December 19, 1984, alleging that structural steel shapes from Norway and Poland were being sold here at less than fair value (LTFV). In February of 1985, the ITC made a preliminary determination there was a reasonable indication of material injury or threat of material injury to the domestic industry because of these combined imports. In June of 1985, the ITA made preliminary dumping determinations, fixing a 59.96 percent margin for Polish imports, see Carbon Steel Structural Shapes from Poland, 50 Fed.Reg. 23,329 (Dep't Comm.1985), and an 8.62 percent margin for Norwegian imports, see Carbon Steel Structural Shapes from Norway, 50 Fed.Reg. 23,326 (Dep't Comm.1985).

Poland, Spain, and South Africa

Later in 1985, the United States and Poland entered into a Voluntary Restraint Agreement (VRA) ¹ wherein Poland agreed to reduce exports of steel products to the U.S. on the condition that U.S. producers On January 3, 1983, various Spanish steel imports determined to have been subsidized were made subject to a countervailing duty (CVD) order. See Stainless Steel Wire Rod from Spain, 48 Fed.Reg. 52 (Dep't Comm.1983) (order). In September of 1982, subsidized South African steel imports were also made subject to countervailing duties. See Certain Steel Products from South Africa, 47 Fed.Reg. 39,379 (Dep't Comm.1982) (order).

                such as Chaparral withdraw their petitions for the investigation.  Chaparral withdrew its petition and both the ITC and ITA terminated their respective investigations of the Polish imports.    See Carbon Steel Structural Shapes from Poland, 50 Fed.Reg. 31,931 (USITC 1985) (termination);  50 Fed.Reg. 32,101 (Dep't Comm.1985) (same).  Consequently, no final determination of LTFV sales from Poland was ever made
                

On December 13, 1984, following a petition by United States Steel Corporation, the ITA made a final determination that Spanish structural steel shapes were being sold at LTFV. See Certain Carbon Steel Products from Spain, 49 Fed.Reg. 48,582 (Dep't Comm.1984) (final). During the pendency of the ITC's final injury investigation, in January of 1985, Spain and the United States entered into a VRA and the ITC investigation of injury was terminated. Thus no antidumping duty order was entered with respect to Spanish imports. See Certain Carbon Steel Products from Australia, Finland, and Spain, 50 Fed.Reg. 4276 (USITC 1985) (termination). Also, due to the VRA, the outstanding CVD order was revoked retroactively to October 1, 1984. See Certain Steel Products from Spain, 50 Fed.Reg. 33,809 (Dep't Comm.1985) (revocation). In 1985, during the annual review period, ITA also revoked the CVD order previously imposed against subsidized South African steel imports because of a lack of interest by the domestic industry in a continued order. See Certain Steel Products from South Africa, 50 Fed.Reg. 35,851 (Dep't Comm.1985) (revocation). The revocation was retroactive to October 1, 1984. Id.

Norway

On October 23, 1985, the ITA concluded its investigation, which had preliminarily found an 8.6 percent margin, and made a final determination that the imports from Norway were being sold at LTFV by a margin of 13.7 percent. Carbon Steel Structural Shapes from Norway, 50 Fed.Reg. 42,975 (Dep't Comm.1985). ITC, however, made a final negative injury determination concluding that there was no material injury to the domestic steel industry by reason of any less than fair value imports from Norway. ITC found, inter alia, that the volume of imports from Norway was at a relatively low level and that there was no causal link between the Norwegian sales and harm to the domestic industry. See Carbon Steel Structural Shapes from Norway, USITC Pub. 1785, Inv. No. 731-TA-234, at 9-12. When it made that determination, ITC did not cumulate ² with the Norwegian imports those from Poland and Spain subject to the antidumping investigations terminated by the VRAs, because ITC concluded that these imports were not subject to a pending investigation and thus did not fall under the cumulation provision of 19 U.S.C. Sec. 1677(7)(C)(iv) (1988). Likewise, imports from Spain and South Africa, upon which CVD orders were issued, were not cumulated because those imports did not enter the U.S. market "reasonably coincident" in time with the imports from Norway.

In making its final negative injury determination for Norway, the ITC gave this specific justification for declining to cumulate:

To warrant cumulative analysis, the unfairly traded imports must satisfy three requirements. They must compete with both other imports and the domestic like product, be subject to investigation, and be marketed within a reasonable coincidental period. In this instance, the Both Poland and Spain have entered voluntary restraint agreements (VRAs) with the United States. The antidumping investigations regarding imports from these countries of the products at issue in the instant investigations were terminated as a result of the withdrawal of the petitions. The terminations occurred prior to any final determinations as to whether the imports were unfairly traded. The statute does not require cumulation in such circumstances. Because these imports have not been and will not be determined to be unfairly traded and because they are not subject to a pending investigation, we conclude that it is not appropriate to include them in any cumulative analysis.

"candidates" for cumulation proposed by petitioner fail to satisfy two of the three requirements.

Absent consideration of imports from countries subject to VRAs, the only remaining imports of the subject products available for consideration are those structural shapes from South Africa and Spain upon which countervailing duty orders were issued.... Further, we note that the CVD orders in question are remote in time, and the unfairly traded imports which were subject to the investigations resulting in those orders did not enter the U.S. market reasonably coincident in time with the imports currently under investigation. Consequently, there are no imports of carbon steel structural shapes which satisfy the criteria for cumulation with imports from Norway.

Carbon Steel Structural Shapes from Norway, USITC Pub. 1785, at 7-9 (footnotes omitted) (emphasis added).

Chaparral appealed the ITC's determination because of its decision not to cumulate imports from Poland, Spain, and South Africa. The Court of International Trade held that ITC was required to cumulate the volume and price effects of the imports from Poland, Spain, and South Africa with like imports from Norway for the period of the Norway investigation. Chaparral Steel Co. v. United States, 698 F.Supp. 254, 265-66 (Ct. Int'l Trade 1988). The court held that the phrase "subject to investigation" must be interpreted by reference "to the time frame involved in the [Norwegian] injury investigation." Id. at 265. The court reasoned that even a preliminary ITA determination of LTFV sales can properly trigger cumulation because "the absence of a final determination is not dispositive but merely affects the weight and credibility of the evidence and not its overall relevance." Id.

With respect to the subsidized imports from Spain and South Africa, the court rejected the ITC's view that only the imports entered prior to the effective date of the CVD orders can be considered unfairly traded and those imports were not reasonably coincident in time with the Norwegian imports. The court reasoned that, despite the CVD orders, those imports might have residual effects.

The ITC and the Norwegian manufacturer, Norsk Jernverk A.S., sought and obtained certification for an interlocutory appeal from the Court of International Trade's order remanding the case to the ITC and directing the ITC to cumulate the imports from Poland, Spain, and South Africa with the imports of...