Copperweld Corp. v. US

• Decision Date: 24 February 1988
• Docket Number: Court No. 86-03-00338.
• Parties: COPPERWELD CORP., UNR-Leavitt, Div. UNR, Inc., and Welded Tube Co. of America, Plaintiffs, v. UNITED STATES and United States International Trade Commission, Defendants, Titan Industrial Corp., Defendant-Intervenors.
• Court: U.S. Court of International Trade

682 F. Supp. 552

12 CIT 148

COPPERWELD CORP., UNR-Leavitt, Div. UNR, Inc., and Welded Tube Co. of America, Plaintiffs, v. UNITED STATES and United States International Trade Commission, Defendants, Titan Industrial Corp., Defendant-Intervenors.

Court No. 86-03-00338.

United States Court of International Trade.

February 24, 1988.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Schagrin Associates (Roger B. Schagrin and Paul W. Jameson, Washington, D.C., on the motion) for plaintiffs.

Richard K. Willard, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice (Kevin Horgan, on the motion) and Lyn M. Schlitt, Gen. Counsel, Michael P. Mabile, Asst. Gen. Counsel, U.S. Intern. Trade Com'n (Jack M. Simmons, III and Edwin J. Madaj, Jr., Washington, D.C., on the motion), for defendants.

Dow, Lownes & Albertson (William Silverman, Leslie H. Wiesenfelder, and Michael P. House, Washington, D.C., on the motion), for defendant-intervenor.

Dewey, Ballantine, Bushby Palmer and Wood (Michael H. Stein, Washington, D.C., on the motion), for the amicus curiae, Lone Star Steel Co., Inc.

MEMORANDUM OPINION

CARMAN, Judge:

Plaintiffs, Copperweld Corp., UNR-Leavitt, Div. UNR, Inc., and Welded Tube Company of America move for judgment on the agency record pursuant to rule 56.1(c)(1) of the Rules of this Court. Plaintiffs challenge the final negative determination by the International Trade Commission (ITC or Commission) in Heavy-Walled Rectangular Welded Carbon Steel Pipes and Tubes from Canada, Inv. No. 731-TA-254 (Final), USITC Pub. No. 1808 (February, 1986) Rectangular Pipes and Tubes from Canada (Final). The ITC determined that the U.S. industry producing this product was not being materially injured or threatened with material injury by reason of the imports of this product from Canada.

Plaintiffs advance several arguments in support of their motion. Plaintiffs contend that the ITC is prohibited from considering the dumping or LTFV margin as a discretionary "other factor" in an injury determination. They urge that some Commissioners decline to examine evidence of price underselling. Plaintiffs also contend that one of the Commissioners applies an erroneous causation analysis. Finally, plaintiffs argue that there is insufficient evidence in the record for the determination that the domestic industry was neither materially injured nor threatened with material injury by reason of the imports from Canada.

For the reasons that follow, the Court finds the determination of the ITC in Rectangular Pipes and Tubes from Canada (Final) is supported by substantial evidence in the record and otherwise in accordance with law. Plaintiffs' motion for judgment on the agency record is therefore denied.

FACTS

On March 25, 1985, a petition was filed on behalf of the structural tubing subcommittee of the Committee on Pipe and Tube Imports and the individual producer members of that subcommittee including the plaintiffs. The petitioners alleged that imports of heavy-walled rectangular welded carbon steel pipes and tubes from Canada (H-WR) are being or are likely to be sold in the United States at less than fair value (LTFV) and that these imports are materially injuring or threatening material injury to a United States industry.

On April 15, 1985, the International Trade Administration (ITA) initiated a LTFV investigation. Certain Heavy-Walled Rectangular Welded Carbon Steel Pipes and Tubes from Canada; Initiation of Antidumping Duty Investigation, 50 Fed.Reg. 15771 (April 22, 1985). The ITC thereupon issued a preliminary determination that imports of H-WR are materially injuring a U.S. industry. Heavy-Walled Rectangular Welded Carbon Steel Pipes and Tubes from Canada, Inv. No. 731-TA-254 (Preliminary), USITC Pub. No. 1691 (May, 1985) Rectangular Pipes and Tubes from Canada (Preliminary).

One of the companies investigated was the defendant-intervenor, Titan Industrial Corp. (Titan). Titan, the largest importer of the subject merchandise, and a U.S. company, accounts for approximately 80% of the imports of the product under investigation. Titan purchases steel coil in Canada, converts the coil into finished H-WR, and sells the H-WR in the United States. Titan does not sell the finished H-WR in Canada.

Notice of the ITA's preliminary negative determination was published on September 10, 1985. Certain Heavy-Walled Rectangular Welded Carbon Steel Pipes and Tubes from Canada; Preliminary Determination of Sales at Not Less Than Fair Value, 50 Fed Reg. 36910 (Sept. 10, 1985). The ITA determined that a dumping margin of 0.47% for Titan and 0.10% for Acier Royalcor Steel, Inc. (Royalcor) were de minimis.

On November 22, 1985, notice of the ITA's final affirmative determination was published. See Certain Heavy-Walled Rectangular Welded Carbon Steel Pipes and Tubes from Canada; Final Determination of Sales at Less Than Fair Value, 50 Fed.Reg. 48238 (Nov. 22, 1985). The dumping margin for Titan was found to be 0.65%.¹

Following a hearing before the Commissioners, the ITC voted 5-1 that an industry in the United States is not materially injured or threatened with material injury by reason of the imports of H-WR from Canada.

In the final determination, the views of a plurality of Commissioners, Chairwoman Stern, Vice Chairman Liebler, and Commissioner Brunsdale were published as a single opinion.² These Commissioners based their determination primarily on the lack of any causal connection between the imports from Canada and the condition of the domestic industry. Rectangular Pipes and Tubes from Canada (Final), supra, at 3. They determined that there was no material injury by reason of imports and made the following findings:

In determining whether there is material injury to the domestic industry "by reason of" the imports subject to the investigation, the Commission must consider, among other factors, the volume of imports, the effect of the LTFV imports on prices in the United States for the like product, and the impact of such imports on the relevant domestic industry. In this investigation, we find that there is no material injury by reason of the imports. This conclusion rests principally on findings of: no significant increase in import market share in an expanding market; no significant impact on prices; increases in U.S. production, domestic shipments, and capital expenditures; and the extremely low weighted average dumping margin found by the Department of Commerce.

Rectangular Pipes and Tubes from Canada (Final), supra, at 8-9 (footnotes omitted). The concurring views of Commissioners Lodwick and Rohr were also published in a separate opinion. While generally agreeing with the plurality's conclusion that the domestic H-WR industry is not materially injured or threatened with material injury by reason of H-WR imports from Canada, Commissioners Lodwick and Rohr concluded that the U.S. industry is experiencing material injury. They emphasized that the information does not "support the conclusion that Canadian imports are a cause of material injury to the domestic industry." Id. at 23 (emphasis supplied).³

BACKGROUND

In a final antidumping duty investigation, the ITC is directed to ascertain whether:

(A) an industry in the United States—

(i) is materially injured, or

(ii) is threatened with material injury, or

(B) the establishment of an industry in the United States is materially retarded, by reason of imports, or sales (or the likelihood of sales) for importation, of the merchandise with respect to which the administering authority has made an affirmative determination under subsection (a)(1) of this section.

19 U.S.C.A. § 1673b(d) (1980 & Supp.1986). Material injury is "harm which is not inconsequential, immaterial, or unimportant." 19 U.S.C.A. § 1677(7)(A) (1980).

In an investigation under § 1673d(b), the ITC is required to consider the following factors, among others:

(i) the volume of imports of the merchandise which is the subject of the investigation,

(ii) the effect of imports of that merchandise on prices in the United States for like products, and

(iii) the impact of imports of such merchandise on domestic producers of like products.

19 U.S.C.A. § 1677(7)(B) (1980). In evaluating the volume, price effects, and impact on the domestic industry of the imports, the ITC must consider the following:

(i) Volume. — In evaluating the volume of imports of merchandise, the Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States, is significant.

(ii) Price. — In evaluating the effect of imports of such merchandise on prices, the Commission shall consider whether —

(I) there has been significant price undercutting by the imported merchandise as compared with the price of like products of the United States, and

(II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.

(iii) Impact on affected industry. — In examining the impact on the affected industry, the Commission shall evaluate all relevant economic factors which have a bearing on the state of the industry, including, but not limited to —

(I) actual and potential decline in output, sales, market share, profits, productivity, return on investments, and utilization of capacity,

(II) factors affecting domestic prices, and

(III) actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investment.

19 U.S.C.A. § 1677(7)(C) (1980).

By contrast, in an evaluation of threat of material injury, the ITC must consider the following relevant economic factors, among others:

(I) If a subsidy is involved, such information as may be presented to it by the administering authority as to the nature of the subsidy

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