Consolidated Fibers, Inc. v. U.S.

• Decision Date: 10 January 2008
• Docket Number: Slip Op. 08-2. Court No. 06-00134.
• Citation: 535 F.Supp.2d 1345
• Parties: CONSOLIDATED FIBERS, INC., Stein Fibers, Ltd., Bernet International Trading, LLC, and BMT Commodity Corporation, Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

535 F.Supp.2d 1345

CONSOLIDATED FIBERS, INC., Stein Fibers, Ltd., Bernet International Trading, LLC, and BMT Commodity Corporation, Plaintiffs, v. UNITED STATES, Defendant.

Slip Op. 08-2. Court No. 06-00134.

United States Court of International Trade.

January 10, 2008.

DeKieffer & Horgan (Gregory S. Menegaz, Merritt R. Blakeslee, J. Kevin Horgan) for Plaintiffs Consolidated Fibers, Inc., Stein Fibers, Ltd., Bernet International Trading, LLC, and BMT Commodity Corporation.

James M. Lyons, General Counsel, Neal J. Reynolds, Assistant General Counsel for Litigation, Karl von Schriltz, Attorney-Advisor, United States International Trade Commission, for Defendant.

Kelly Drye Collier Shannon, Washington, DC (Paul C. Rosenthal, Kathleen W. Cannon, David C. Smith, Jr.) for Defendant-Intervenors Dak Fibers, LLC, Invista S.a.r.l, and Wellman, Inc.

OPINION

GORDON, Judge.

Plaintiffs move for judgment on the agency record pursuant to USCIT R. 56.1, challenging the United States International Trade Commission's ("Commission") refusal to reconsider the original injury determination underlying the antidumping duty order on polyester staple fiber ("PSF") from Korea and Taiwan. For the reasons set forth below, the court denies Plaintiffs' motion.

I. Background

In March 2005 the. Commission instituted five-year reviews ("sunset reviews") of the antidumping duty orders on PSF from Korea and Taiwan. After the sunset reviews commenced, Plaintiffs (importers of PSF) discovered evidence that some domestic producers of PSF had allegedly conspired to fix PSF prices and allocate customers during the original period of investigation and part of the sunset review period. Plaintiffs were eager to share this information with the Commission because a comparable revelation in another proceeding had led the Commission to rescind the original injury determinations in that proceeding. See Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, Inv. Nos. 303-TA-23, 731-TA-566-570 and 731-TA-641 (Reconsideration), USITC Pub. 3218 (Aug.1999) at 3, 8 ("Ferrosilicon Reconsideration").

In the Ferrosilicon Reconsideration the Commission learned of a criminal pricefixing conspiracy among the domestic ferrosilicon producers through the Brazilian ferrosilicon producers' request for a changed circumstances review pursuant to Section 751(b) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675(b) (2000).¹ Troubled by the revelation of an antitrust conspiracy affecting pricing in the domestic ferrosilicon market, the Commission took the unprecedented step of sua sponte suspending the changed circumstances proceedings and commencing "reconsideration" proceedings to review the original injury determinations underlying the antidumping and countervailing duty orders on ferrosilicon. Ferrosilicon From Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, 64 Fed.Reg. 28,212 (Int'l Trade Comm'n May 25, 1999) (notice of suspension of changed circumstances review and commencement of reconsideration proceeding). In the course of those reconsiderations, the Commission discovered that in the original investigations the domestic ferrosilicon producers had misrepresented that the "U.S. ferrosilicon market was driven by unfettered price competition," when in fact, "three ferrosilicon producers, representing a significant majority of 1993 U.S. production, had been convicted of conspiring to fix domestic prices of commodity ferrosilicon" during a "substantial portion of the time period on which the Commission based its original determination." Ferrosilicon Reconsideration at 3, 8. Because "[t]he Commission's statute and longstanding Commission, precedent place the nature of price competition at the center of its injury analysis," id., the Commission concluded that the "actions by the domestic producers seriously undermined the integrity of the Commission's proceedings and compromised the deliberative process, and in a broader sense, constituted an abuse of the unfair trade laws [the Commission] administer[s]." Id.

The Commission ultimately reversed Fits original injury determinations and issued negative injury determinations for each of the ferrosilicon investigations. Id. at 1, 4. The United States Department of Commerce ("Commerce") subsequently "rescinded" the antidumping and countervailing duty orders covering the subject imports, explaining that the Commission's negative injury determinations on reconsideration had "rendered [the orders] legally invalid from the date of issuance." Ferrosilicon From Brazil, Kazakhstan, People's Republic of China, Russia, Ukraine, and Venezuela, 64 Fed.Reg. 51,097, 51,098 (Dep't of Commerce Sept. 21, 1999) (notice of rescission of antidumping duty orders):

Returning to the facts of the PSF case under review here, on October 26, 2005, Plaintiffs filed a letter with the Commission requesting that the Commission institute a proceeding to reconsider the original PSF injury determinations because of new evidence that certain domestic producers conspired to fix PSF prices and allocate customers during the original period of investigation and part of the sunset review period. As support, Plaintiffs cited the guilty pleas of KoSa, a domestic producer of PSF, and Troy Stanley, a KoSa employee, in a criminal antitrust case brought by the United States Department of Justice, and agreements from three other domestic PSF producers settling civil antitrust litigation, among other documents. Plaintiffs argued that like the Ferrosilicon Reconsideration the conspiracy had compromised the integrity of the Commission's original investigations and that the Commission should therefore institute a reconsideration proceeding to determine whether to revoke the antidumping duty Orders.

Unlike its approach in the Ferrosilicon Reconsideration, the Commission did not commence a reconsideration of the PSF original injury determinations. Instead, on December 19, 2005, the Commission issued a letter denying Plaintiffs' reconsideration request "at this time." Subsequently, Plaintiffs and petitioners, Defendant-Intervenors here, addressed the alleged antitrust conspiracy in their briefs and final comments filed in the sunset reviews, and submitted documentary evidence for, their respective claims. Plaintiffs reiterated and expanded upon the arguments made in their October 26, 2005 letter. They again invoked the Commission's Ferrosilicon Reconsideration to argue that the Commission should revoke the antidumping orders on PSF from Korea and Taiwan ab initio because an alleged conspiracy among certain domestic producers to fix prices and allocate customers during a portion of the period examined in the original investigation had compromised the integrity of the original investigative record. Plaintiffs also requested that the Commission "order discovery" and "force domestic producers to dislodge information concerning the conspiracy," including all discovery taken and all written and deposition testimony from the civil antitrust litigation. Due to the volume of these materials, Plaintiffs requested that the Commission extend the sunset reviews by 90 days.

Defendant-Intervenors argued that Plaintiffs' price-fixing allegations and documents concerned a conspiracy to fix prices and allocate customers for fine denier PSF used in textile spinning applications, a product not subject to the antidumping duty orders on PSF from Korea and Taiwan. They also argued that the alleged PSF antitrust conspiracy was unlike the Ferrosilicon Reconsideration antitrust conspiracy in that the overlap between the conspiracy and the period of investigation was minimal, and individuals who participated in the conspiracy had not participated in the Commission's investigation.

The Commission conducted a public hearing on January 17, 2006. At the hearing, Plaintiffs and Defendant-Intervenors provided testimony and answered questions on the alleged antitrust conspiracy. In response to Commissioner questions at the hearing, Defendant-Intervenors provided additional documents relevant to Plaintiffs' allegations as attachments to their posthearing brief.

Thereafter, the Commission gathered certain information from a source [[ ]].² On March 20, 2006, the Commission issued its final decision on the matter, rejecting Plaintiffs' reconsideration request in a detailed analysis that the Commission chose to include in its final views for the sunset reviews of PSF from Korea and Taiwan. See Certain Polyester Staple Fiber From Korea and Taiwan, Inv. Nos. 731-TA-825 and 826 (Final), USITC" Pub. 3843 (Mar.2006) Conf. Views at 21-32, Pub. Views at 16-23 ("PSF Reconsideration Denial"). The Commission interpreted Plaintiffs' argument that the Commission should revoke the antidumping duty orders ab initio as a renewal of their request for institution of a reconsideration proceeding because the Commission lacks the authority to revoke antidumping duty orders and the Commission believed it could not reconsider its original determinations within the scope of the sunset reviews. PSF Reconsideration Denial Pub. Views at 18.

The Commission addressed the alleged antitrust conspiracy and concluded:

[T]he weight of the voluminous record evidence indicates that any conspiracy was primarily limited to non-subject PSF, and that record evidence does not support the proposition that any conspiracy extended to certain PSF [subject to the antidumping duty order]. The information relied upon by respondents is generally indirect or inconclusive, and requires assumptions that are contradicted by other evidence.

Id. at 22. Having found that the antitrust conspiracy to which KoSa and Mr. Stanley pled guilty targeted fine denier. PSF and not the PSF subject to the antidumping duty order, the Commission concluded that circumstances did not warrant institution of a reconsideration proceeding. Id. at 22-23.

The Commission also distinguished its actions in the Ferrosilicon Reconsideration in...