Connecticut Steel Corp. v. US

• Decision Date: 22 April 1994
• Docket Number: Court No. 93-07-00382. Slip Op. 94-64.
• Citation: 18 CIT 313,852 F. Supp. 1061
• Parties: CONNECTICUT STEEL CORPORATION, Co-Steel Raritan, Georgetown Steel Corporation, Keystone Steel & Wire Company, and North Star Steel Texas, Inc., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

852 F. Supp. 1061

18 CIT 313

CONNECTICUT STEEL CORPORATION, Co-Steel Raritan, Georgetown Steel Corporation, Keystone Steel & Wire Company, and North Star Steel Texas, Inc., Plaintiffs, v. UNITED STATES, Defendant.

Court No. 93-07-00382. Slip Op. 94-64.

United States Court of International Trade.

April 22, 1994.

Wiley, Rein & Fielding (Charles Owen Verrill, Jr., Alan H. Price, Willis S. Martyn III, Peter S. Jordan and Brian E. Rosen), Washington, DC, for plaintiffs.

Lyn M. Schlitt, Gen. Counsel, James A. Toupin, Asst. Gen. Counsel, U.S. Intern. Trade Com'n (Rhonda M. Hughes), Washington, DC, for defendant.

MEMORANDUM OPINION AND ORDER

DiCARLO, Chief Judge:

Plaintiffs, Connecticut Steel Corporation, Co-Steel Raritan, Georgetown Steel Corporation, Keystone Steel & Wire Company, and North Star Steel Texas, Inc., move for judgment on the agency record pursuant to USCIT R. 56.2, contesting the negative preliminary determination of the United States International Trade Commission in Certain Steel Wire Rod From Trinidad and Tobago, Inv. No. 731-TA-649 (Preliminary), USITC Pub. 2647 (June 1993), 58 Fed.Reg. 33,280 (1993). The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(1) (1988) and 28 U.S.C. § 1581(c) (1988). Plaintiffs' motion is denied.

BACKGROUND

Plaintiffs filed a petition with the Commission and the Department of Commerce in April 1993, alleging that imports of certain steel wire rod from Brazil, Canada, Japan, and Trinidad and Tobago, were sold in the United States at less than fair value (LTFV) and that such imports materially injured the domestic industry. Accordingly, the Commission instituted a preliminary antidumping duty investigation pursuant to 19 U.S.C. § 1673b(a) (1988). During the investigation, the Commission received information from responses to its questionnaires to importers, foreign producers and domestic producers. It also received information from the American Wire Producers' Association (AWPA), a trade association representing domestic producers of steel wire rod and wire products, which conducted a survey of its members who purchased wire rod from domestic and imported sources to manufacture wire products. Upon considering the evidence, the Commission determined, by a 5-1 vote, that there was no reasonable indication that the domestic industry was materially injured or threatened with material injury by reason of the alleged LTFV imports from Trinidad and Tobago; the Commission also determined that there was a reasonable indication that the domestic industry was materially injured by reason of the alleged LTFV imports from Brazil, Canada and Japan.¹ Certain Steel Wire Rod From Brazil, Canada, Japan, and Trinidad and Tobago, Invs. Nos. 731-TA-646-649 (Preliminary), USITC Pub. 2647 (June 1993); 58 Fed.Reg. 33,280 (1993).

The Commission's negative determination regarding Trinidadian imports was based on a number of factors. The Commission found that the volume and market share of the Trinidadian imports increased but remained low throughout the period of investigation, that customers purchased steel wire rod from Trinidad and Tobago for non-price reasons, such as to maintain an offshore source and to reduce the risk of disruption of domestic production and allocations, and that there was a clear pattern of overselling of U.S. products by the Trinidadian imports (i.e., imports priced higher than like domestic products). With respect to the negative threat determination in particular, the Commission found that there was no indication of price depression or suppression due to the Trinidadian imports, that the capacity utilization of the sole wire rod producer in Trinidad and Tobago, Caribbean Ispat Ltd. (Ispat), was very high, and that Ispat had numerous other traditional export markets accounting for the bulk of its production and was unlikely to shift the exports to the United States in the event that antidumping duties were levied on imports from Brazil, Canada and Japan.

Plaintiffs allege that the Commission's negative determination violates the letter and the spirit of the legal standard for preliminary investigations and request the case be remanded to the Commission for a redetermination.

DISCUSSION

1. Standard of Review

This court will uphold the Commission's negative preliminary injury determination unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(A) (1988). The court shall apply traditional administrative law principles in review of the Commission's preliminary determination, and the review is "to ascertain whether there was a rational basis in fact for the determination." American Lamb Co. v. United States, 4 Fed. Cir. (T) 47, 58-59, 785 F.2d 994, 1004 (1986) (quoting S.Rep. No. 249, 96th Cong., 1st Sess. 252 (1979), reprinted in 1979 U.S.C.C.A.N. 381, 638).

In a preliminary antidumping investigation, the Commission is required to determine, based on the best information available to it at the time of the preliminary determination, whether there is a reasonable indication that an industry in the United States is materially injured or is threatened with material injury by reason of imports of the merchandise under investigation. 19 U.S.C. § 1673b(a). The Commission has interpreted the statutory "reasonable indication" standard as requiring that a negative preliminary determination of injury be reached only when (1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of injury by reason of imports, and (2) no likelihood exists that contrary evidence will arise in a final investigation. The Commission's interpretation of the statutory standard was upheld by the Court of Appeals for the Federal Circuit. American Lamb, at 55, 785 F.2d at 1001.

2. The Standard of Clear and Convincing Evidence

Plaintiffs assert that the Commission's determination was arbitrary, capricious, an abuse of discretion and not in accordance with law because it was not supported by clear and convincing evidence in the record. Plaintiffs claim that the Commission erred in making its determination based on contradictory data in the record and acted arbitrarily in ignoring evidence clearly supporting an affirmative determination.

It has been well established that, in applying the statutory standard of "reasonable indication" of injury, the Commission may weigh all the evidence and resolve conflicts in the evidence. See American Lamb, 4 Fed. Cir. (T) at 56, 785 F.2d at 1002. The Commission's weighing of evidence in a preliminary determination is necessary for the purpose of "eliminating unnecessary and costly investigations which are an administrative burden and an impediment to trade." Id. at 57, 785 F.2d at 1002-3 (quoting S.Rep. No. 1298, 93rd Cong., 2d Sess. 171, reprinted in 1974 U.S.C.C.A.N. 7186, 7308). In asserting that the evidence supporting the Commission's determination is not clear and convincing because of the conflicting evidence in the record, plaintiffs request the court to reweigh the evidence. The court, however, cannot substitute its judgment for that of the Commission. Its role is to ascertain whether there was a rational basis for the determination, not to decide whether it would have made a different decision on the basis of the evidence. Torrington Co. v. United States, 16 CIT ___, ___, 790 F.Supp. 1161, 1167 (1992) (citing American Lamb, 4 Fed.Cir. (T) at 59, 785 F.2d at 1004; Matsushita Elec. Indus. Co. v. United States, 3 Fed.Cir. (T) 44, 54, 750 F.2d 927, 936 (1984)), aff'd 11 Fed.Cir. (T) ___, 991 F.2d 809 (1993). The court may reverse the Commission's determination only where there is "a clear error of judgment" and where "there is no rational nexus between the facts found and the choices made." Jeannette Sheet Glass Corp. v. United States, 11 CIT 10, 15, 654 F.Supp. 179, 183 (1987) (citations omitted).

Plaintiffs also assert that, under American Lamb, the Commission's determination must address whether particular evidence is clear and convincing and why that evidence forecloses further inquiry. Based on this assumption, plaintiffs attack individual pieces of evidence relied upon by the Commission as not clear and convincing. Plaintiffs, however, misstate the Commission's standard for reaching a negative determination. Rather than requiring each piece of evidence to be found clear and convincing, the standard approved by American Lamb requires that "the record as a whole" contain clear and convincing evidence that there is no material injury or threat of injury by reason of imports. American Lamb, 4 Fed.Cir. (T) at 55, 785 F.2d at 1001.

Plaintiffs further claim that the Commission's determination was arbitrary because it failed to discuss conflicting evidence provided by plaintiffs and failed to make a finding, and to provide explanations for such a finding, that its determination is supported by clear and convincing evidence and that no likelihood exists that contrary evidence will arise in a final investigation. "There is no statutory requirement that the Commission must respond to each piece of evidence presented by the parties." Torrington, 790 F.Supp. at 1168 (citation omitted). The standard of clear and convincing evidence and no likelihood of future contrary evidence was set by the Commission in implementing the statutory standard of "no reasonable indication" of injury, and that standard was affirmed by the court as "permissible within the statutory framework." American Lamb, 4 Fed.Cir. (T) at 55, 785 F.2d at 1001. The Commission, however, is not required by law, nor has it developed a practice, to make an explicit finding that the standard has been met and to explain why it so finds. "A court may `uphold an agency's decision of less than ideal clarity if the agency's path may reasonably be discerned.'" Ceramica Regiomontana, S.A. v. United States, 5 Fed.Cir. (T) 77, 78, 810 F.2d 1137, 1139 (1987) (quoting Bowman Transp.,...