Chung Ling Co., Ltd. v. US

• Decision Date: 25 September 1992
• Docket Number: No. 90-10-00528.,90-10-00528.
• Citation: 16 CIT 843,805 F. Supp. 56
• Parties: CHUNG LING CO., LTD. et al., Plaintiffs, v. UNITED STATES, Defendant, and National Knitwear and Sportswear Association, Defendant-Intervenor.
• Court: U.S. Court of International Trade

805 F. Supp. 56

16 CIT 843

CHUNG LING CO., LTD. et al., Plaintiffs, v. UNITED STATES, Defendant and National Knitwear and Sportswear Association, Defendant-Intervenor.

No. 90-10-00528.

United States Court of International Trade.

September 25, 1992.

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Whitman & Ransom, Charles H. Bayar, New York City, for Chung Ling Co., Ltd. and other Taiwan plaintiffs.

Grunfeld, Desiderio, Lebowitz & Silverman, Bruce M. Mitchell and David L. Simon, Washington, D.C., for plaintiff Comitex Knitters, Ltd.

Steptoe & Johnson, Susan G. Esserman and Gracia M. Berg, Washington, D.C., for Cheonji Sanup, Inc. and other Korean plaintiffs.

Gibson, Dunn & Crutcher, Joseph H. Price, Donald Harrison, and Thomas P. Simon, Washington, D.C., for defendant-intervenor.

Office of General Counsel, U.S. Intern. Trade Com'n, Lyn M. Schlitt, Gen. Counsel, James A. Toupin, Asst. Gen. Counsel, and George Thompson, Atty.-Advisor, Washington, D.C., for defendant.

MEMORANDUM OPINION AND ORDER

CARMAN, Judge:

INTRODUCTION

In these consolidated antidumping actions, defendant moves to amend the interlocutory order of July 28, 1992, 805 F.Supp. 45, remanding the final affirmative injury determinations of the United States International Trade Commission, Sweaters Wholly or in Chief Weight of Manmade Fibers from Hong Kong, the Republic of Korea, and Taiwan, Inv. Nos. 731-TA-448, 449 and 450 (Final), USITC Pub. No. 2312 (Sept. 1990) ("ITC Report"). Defendant's proposed amendment would add to 805 F.Supp. 45 the certification required by 28 U.S.C. § 1292(d)(1) for an interlocutory appeal regarding "controlling questions of law." Alternatively, defendant seeks an enlargement of the time from 45 to 120 days in which to complete the remand proceedings, exclusive of the time the remand may be stayed pending decision of the current motion.

By previous order of this court dated August 28, 1992, defendant's motion for stay of the remand proceedings was granted. For the reasons stated hereinafter, defendant's motion to amend is denied, but an extension of time for completing the remand proceedings is granted, as discussed below. The cross-motion of Comitex Knitters, Ltd. for oral argument is denied in view of the excellent briefing submitted by counsel for the parties and in the interest of expediting the remand phase of these proceedings.

QUESTIONS FOR WHICH DEFENDANT SEEKS CERTIFICATION

Under 28 U.S.C. § 1292(d)(1) an interlocutory order of the Court of International Trade may be appealed to the Federal Circuit, if this court certifies in the order that: "a controlling question of law is involved with respect to which there is a substantial ground for difference of opinion and that an immediate appeal from that order may materially advance the ultimate termination of the litigation, and the United States Court of Appeals for the Federal Circuit * * *, in its discretion, permits an appeal to be taken from such order * * *."

Defendant seeks by way of amendment of 805 F.Supp. 45 a certification for immediate appeal from the remand order pursuant to § 1292(d)(1) as to essentially four basic issues:

(1) whether the Commission's producer questionnaire data base as supplemented by the Bureau of the Census data was substantial evidence on the record supporting the Commission's findings and determinations and whether the Commission articulated a sound rationale for rejecting an adverse inference against the domestic industry;

(2) whether the Commission's producer questionnaire data was skewed or "tainted" by petitioner's communications and contacts with its producer members and whether the Commission properly investigated plaintiffs' complaints of petitioner's improper interference in the investigations;

(3) whether the Commission's pricing and underselling analysis was supported by substantial evidence on the record;

(4) whether the Commission's determination regarding the "like product," based on fiber composition and the "clear dividing lines" test, was to the extent it was predicated on the finding of a minor position of blends in the U.S. sweater market, supported by substantial evidence on the record.

Defendant's arguments for certifying the foregoing issues for interlocutory appeal display a misapprehension of 805 F.Supp. 45. Therefore, the interests of judicial and administrative economy warrant a further explication of the issues remanded to the Commission.

DISCUSSION

I. PRODUCERS' QUESTIONNAIRE DATA AND ADVERSE INFERENCE

A pervasive evidentiary issue impacting on the Commission's final determinations under the substantial evidence standard of review is the Commission's decision to use a representative stratified sampling methodology for its producer questionnaire data base and then predicating its determinations on the sparse and incomplete producer questionnaire responses. In that connection, it must be emphasized that the Commission initially decided that because of the numerous U.S. sweater producers — in excess of 1,000 — and fragmentation of the U.S. sweater producing industry, it would send producer questionnaires to only a selected representative "stratified" sampling comprised of 197 producers. Plaintiffs do not challenge the Commission's representative sampling methodology.

Despite the Commission's explicit admonitions to U.S. producers in its preliminary determinations as to the adverse consequences for noncooperation in responding to questionnaires in the final investigations, and an intense campaigning effort by petitioner to arouse the interest of its members in cooperating with the investigations, the Commission received but merely 83 responses (many incomplete) — less than half of the Commission's representative sample base. Significantly, the responding firms included only 9 producers of man-made fiber ("MMF") sweaters (the like product under investigation) accounting for only 15 percent of MMF sweater production in 1989. In the final investigations, the Commission supplemented its questionnaire data with statistics from the Census Bureau, posited that its investigation was adequate, and declined to draw an adverse inference against the domestic industry. ITC Report at 28; 805 F.Supp. at 48.

In 805 F.Supp. 45, this court concluded:

Even the substantially increased but still low rate of response in the final investigations left the Commission with limited financial data unrepresentative of the domestic "industry" as defined by the statute.

805 F.Supp. at 48. And,

the Commission, having determined to rely on sampling to obtain representative questionnaire data, erred in making findings and conclusions as to many financial conditions and trends of the "industry" based merely on a small and random portion of the initial representative sampling of producers, and some producers submitted incomplete or partial responses. Such data had no pretense of being representative.

805 F.Supp. at 49.

Initially, the court wishes to correct defendant's misapprehension that in 805 F.Supp. 45 this court held that the Commission has made an "adequate" investigation. The diligence of the ITC staff in gathering the data needed for an accurate determination is essential, and in this case the court explicitly found that the Commission had diligently sought to make an adequate investigation. Clearly, the court is "not reviewing the ITC's diligence." Atlantic Sugar, Ltd. v. United States, 744 F.2d 1556, 1561 (Fed.Cir.1984). Nonetheless, due to the low rate of and incomplete responses, the producer questionnaire data was inadequate to furnish the Commission with any semblance of representative data in critical financial indicators of injury and causation. More, the court pointed out that the supplementary information resorted to by the Commission — Bureau of Census statistics — was also inadequate to supply much critical information that was required for an accurate injury determination. In short, the Commission's final investigations, while clearly "diligent," were inadequate.

Next, defendant erroneously expresses grave concerns that in 805 F.Supp. 45 this court engaged in de novo fact finding contrary to the teaching of the Federal Circuit in Matsushita Elec. Indus. Co., Ltd. v. United States, 929 F.2d 1577 (Fed.Cir. 1991). Defendant's concerns demonstrate confusion of the distinction between the agency's administrative role in "fact finding" and the judiciary's role on review in determining whether the agency's fact finding meets the statutory standard of "substantial evidence on the record." 19 U.S.C. § 1516a(b)(1)(B); 805 F.Supp. at 47.

Granting the Commission's unquestioned administrative prerogative as fact finder and its discretion to make reasonable judgments and inferences in interpreting evidence and determining the overall significance of any particular fact or piece of evidence, Maine Potato Council v. United States, 9 CIT 293, 300, 613 F.Supp. 1237, 1244 (1985), when the Commission's findings and determinations are judicially reviewed under 19 U.S.C. § 1516a(b)(1)(B) the court has a statutory duty to ascertain whether there is substantial evidence on the record for the agency's findings and determinations. See 805 F.Supp. at 47. As observed in Atlantic Sugar, 744 F.2d at 1561, "if that evidence is insubstantial, then the reviewing court must either reverse the ITC's determination or remand the case for further fact-finding. Implicit in such a reversal or remand would be the reviewing court's finding that some person or institution, whether the parties or the ITC or all, inadequately collected and/or interpreted the data."

Analogous to this court's rejection of the producer questionnaire data as substantial evidence on the record, the Federal Circuit noted in Atlantic Sugar:

In short, by rejecting all of the Revere aggregate data, and from there the entire industry determination, because of inclusion of figures for the Chicago plant, the lower court has thrown the baby out with the

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