Chaparral Steel Co. v. US, Court No. 85-12-01767.

• Decision Date: 28 September 1988
• Docket Number: Court No. 85-12-01767.
• Citation: 698 F. Supp. 254
• Parties: CHAPARRAL STEEL COMPANY, Plaintiff, LTV Steel Company and Inland Steel Company, Plaintiff-Intervenors, v. UNITED STATES, Defendant, Norsk Jernverk A.S., Defendant-Intervenor.
• Court: U.S. Court of International Trade

698 F. Supp. 254

CHAPARRAL STEEL COMPANY, Plaintiff LTV Steel Company and Inland Steel Company, Plaintiff-Intervenors, v. UNITED STATES, Defendant Norsk Jernverk A.S., Defendant-Intervenor.

Court No. 85-12-01767.

United States Court of International Trade.

September 28, 1988.

Wiley, Rein & Fielding (Charles Owen Verrill, Jr., Robert E. Nielsen, and Lynn S. West, Washington, D.C., on the motion), for plaintiff.

Cravath, Swaine & Moore (Alan J. Hruska and Robert L. Nowicki, New York City, on the motion), for plaintiff-intervenors.

Lyn M. Schlitt, Gen. Counsel, Michael P. Mabile, Asst. Gen. Counsel, U.S. Intern. Trade Com'n (Charles H. Nalls, Washington, D.C., on the motion), for defendant.

Cadwalader, Wickersham & Taft (Frederick P. Waite, E. Charles Rowan, Jr., and Arnold B. Podgorsky, Washington, D.C., on the motion), for the defendant-intervenor.

MEMORANDUM OPINION AND ORDER

CARMAN, Judge:

Plaintiff, Chaparral Steel Company Chaparral, and plaintiff-intervenors, LTV and Inland Steel Companies collectively referred to as plaintiffs seek review of the final negative injury determination by the United States International Trade Commission ITC or Commission in Carbon Steel Structural Shapes From Norway, Inv. No. 731-TA-234 (Final), USITC Pub. No. 1785 (November, 1985) Final Determination. Plaintiffs contend the record below contains substantial evidence that dumped and/or subsidized structural shapes from Norway, Poland, Spain, and South Africa are a cause of material injury and threat thereof to the domestic industry. They urge the determination is not in accordance with law because the ITC failed to consider statutory causation criteria and instead substituted other criteria inconsistent with the statute and regulations. They further dispute the ITC's decision not to cumulatively assess the volume and price effects of imports from Poland, Spain, and South Africa in accordance with § 612(a)(2)(A) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1677(7)(C)(iv) (1982).

In regard to the issue of cumulation, the Court finds that the ITC misinterpreted § 1677(7)(C)(iv) and accordingly made an erroneous decision not to consider the effects of the dumped and/or subsidized imports from Poland, Spain, and South Africa. The proper test is whether during the period in which the ITC evaluates injury, there are other imports of the like product that are subject to investigation pursuant to the antidumping or countervailing duty laws. The term subject to investigation must be interpreted by reference to the timeframe of the investigation of injury. The status of the proceedings on vote day, the date on which a final determination of injury is rendered, is irrelevant to the analysis. In the present case, the Norwegian injury investigation supplies the frame of reference for the determination of whether cumulation is appropriate. Like imports from Poland, Spain, and South Africa subject to findings of dumping and/or subsidies were present in the market and "subject to investigation" at the time of the Norwegian injury investigation and accordingly all meet the statutory test.

Because of the disposition of this action, the Court finds it unnecessary to reach the remaining issues raised by plaintiff regarding causation and threat of material injury. It may well be that these issues will be treated differently on remand of this action and on proper application of the cumulation provision.

FACTS

Chaparral, on behalf of the domestic industry producing carbon steel structural shapes structural shapes, filed an antidumping duty petition with both the ITC and the International Trade Administration ITA on December 19, 1984. Chaparral alleged that structural shapes from Norway and Poland were being sold at less-than-fair-value LTFV within the meaning of section 731 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1673 (1982).

On February 4, 1985, the ITC rendered a preliminary determination that there was a reasonable indication of material injury, or threat thereof to the domestic industry by reason of structural shapes from Norway and Poland. See Certain Carbon Steel Products from Austria, Czechoslovakia, East Germany, Hungary, Norway, Poland, Romania, Sweden, and Venezuela, Inv. Nos. 701-TA-225-34, 731-TA-213-17, 219, 221-26, 228-35 (Prelim.), USITC Pub. No. 1642 (Feb. 1985). The injury analysis covered the period 1982 through June, 1985. Thereafter, the ITA made a preliminary determination of dumping. It found a 59.96 percent dumping margin with respect to Polish imports, see 50 Fed.Reg. 23329 (June 3, 1985), and an 8.62 percent dumping margin with respect to Norwegian imports, see 50 Fed.Reg. 23326 (June 3, 1985).

On July 11, 1985, Poland and the United States entered into a Voluntary Restraint Agreement VRA whereby Poland agreed to reduce significantly exports of steel products including structural shapes to the United States. On July 19, 1985, counsel for Chaparral sent a letter of understanding to the Commerce Department asserting its belief that the restraint agreement with Poland would have equivalent or better results than a final order. Chaparral also asserted its entitlement to construe the VRA as the "functional equivalent of a suspension of an investigation where there is agreement on the part of the exporters to eliminate the injurious effect of sales at less-than-fair-value as provided in Section 734(c) of the 1979 Trade Agreements Act." Reply Memorandum of Plaintiff in Support of Motion for Judgment on the Agency Record at Annex C, p. 2, Chaparral Steel Co. v. United States (No. 85-12-01767) Chaparral's Reply. On July 24, 1985, the ITC received a letter from Chaparral in which Chaparral withdrew "without prejudice" its petition in the concurrent investigation of structural shapes from Poland. Had Chaparral not withdrawn its petition, presumably, the VRA with Poland would not have gone into effect to the detriment of domestic producers in all sectors of the steel industry.

By notice published August 7, 1985, see 50 Fed.Reg. 31931, and August 8, 1985, see 50 Fed.Reg. 32101, the ITC and the ITA, respectively, terminated the Polish structural shapes investigation. The Polish investigation was terminated just prior to a final determination by the ITA of LTFV sales of the subject merchandise.

During August of 1985, the ITA postponed its final antidumping duty determination with regard to the Norwegian structural shapes. The ITC thereupon revised its schedule for investigation to coincide with the ITA determination. See 50 Fed. Reg. 32758 (Aug. 14, 1985).

The ITA subsequently determined on October 16, 1985, that imports of structural shapes from Norway were being sold at LTFV by a margin of 13.7 percent. See 50 Fed.Reg. 42975 (Oct. 23, 1985). In its final negative determination, the ITC concluded that, while the domestic structural shapes industry was experiencing material injury, there was a lack of causal nexus between this injury and the LTFV imports from Norway. The ITC further found there was no real or imminent threat of material injury to the domestic structural shapes industry. In reaching this determination, the ITC refused to cumulatively assess the volume and price effects of the Polish imports of the like product.

The ITC also refused to cumulatively assess the volume and price effects of dumped Spanish structural shapes as well as subsidized Spanish and South African structural shapes subject to countervailing duty orders.

With regard to dumped Spanish structural shapes, an action was commenced on February 10, 1984 by a petition filed by United States Steel Company. This petition resulted in a final affirmative determination of dumping during December, 1984. See 49 Fed.Reg. 48582 (Dec. 13, 1984). On January 18, 1985, Spain and the United States entered into a VRA. United States Steel Company thereupon withdrew its petition against Spain, and the ITC investigation of these imports was terminated. See 50 Fed.Reg. 4276 (Jan. 30, 1985).

With regard to subsidized Spanish and South African structural shapes, countervailing duty orders became effective on January 3, 1983, and September 7, 1982, respectively. Both orders were revoked effective October 1, 1984 pursuant to the conclusion of restraint agreements. With respect to South Africa, however, the ITA found that subsidies would apply through 1992. See 47 Fed.Reg. 39379, 39380 (Sept. 7, 1982). In regard to Spain, the ITA found that subsidies in the form of three infusions of capital in excess of losses would continue through 1992, 1994, and 1995, respectively. The ITA further found that several other types of subsidies would apply at least through 1986. See 47 Fed. Reg. 51438, 51440-44, 51450-53 (Nov. 15, 1982).

In the final negative determination in the Norwegian investigation, the ITC reasoned that the unfairly traded imports must meet three criteria in order to qualify for cumulative analysis: (1) they must compete with both other imports and the domestic like product; (2) they must be subject to investigation; and (3) they must be marketed within a reasonably coincidental period. Final Determination, USITC Pub. No. 1785 at 7. In applying this criteria, the ITC determined that allegedly dumped imports from Poland and Spain did not qualify for cumulation since the investigations were terminated by withdrawal of petitions prior to any final determination as to whether the imports were unfairly traded:

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

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