DAK Ams. LLC v. United States

• Decision Date: 04 June 2020
• Docket Number: Slip Op. 20-80,Court No. 18-00238
• Citation: 456 F.Supp.3d 1340
• Parties: DAK AMERICAS LLC, Indorama Ventures USA, Inc., and Nan Ya Plastics Corporation, America, Plaintiffs, v. UNITED STATES, Defendant, and Novatex Limited, G-PAC Corporation, Niagara Bottling, LLC, and iResin, LLC, Defendant-Intervenors.
• Court: U.S. Court of International Trade

456 F.Supp.3d 1340

DAK AMERICAS LLC, Indorama Ventures USA, Inc., and Nan Ya Plastics Corporation, America, Plaintiffs,
v.
UNITED STATES, Defendant,
and
Novatex Limited, G-PAC Corporation, Niagara Bottling, LLC, and iResin, LLC, Defendant-Intervenors.

Slip Op. 20-80
Court No. 18-00238

United States Court of International Trade.

June 4, 2020

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Paul C. Rosenthal, Kelly Drye & Warren, LLP, of Washington, DC, argued for plaintiffs. With him on the brief were Kathleen W. Cannon, Brooke M. Ringel, and David C. Smith.

Brian R. Allen, Attorney-Advisor, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, argued for defendant. With him on the brief were Dominic L. Bianchi, General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.

Brenda A. Jacobs, Jacobs Global Trade & Compliance LLC, of McLean, VA, argued for defendant-intervenors, Novatex Limited and G-PAC Corporation. With her on the joint brief were Neil R. Ellis and Shawn M. Higgins, Sidley Austin, LLP, of Washington, DC.

John M. Peterson, Neville Peterson LLP, of New York, NY, argued for defendant-intervenor, Niagara Bottling, LLC. With him on the brief were Richard F. O'Neill and Patrick B. Klein.

Susan G. Esserman, Steptoe & Johnson LLP, of Washington, DC, argued for defendant-intervenor, iResin, LLC. With her on the brief were Joel D. Kaufman and Judy (Zhu) Wang.

OPINION

Katzmann, Judge:

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The maxim, "like cases should be treated alike," attributed to the ancient philosopher Aristotle¹ in Nicomachean Ethics ² , has been characterized more recently by H.L.A. Hart as "a central element in the idea of justice."³ Consistency promotes fairness between parties, predictability that is critical to the administration of justice, and protects against arbitrary and capricious conduct by the institutions that issue determinations and decide disputes. As such, it is a core value of administrative law generally, and it is implicated in this court's review of agency determinations and the adjudication of controversies under the domestic laws regulating international trade. That principle of consistency is central to the case now before the court, arising in the context of a challenge to the adequacy of agency reasoning under the substantial evidence standard, and raising issues regarding an agency's obligation to address significant conflicting arguments and evidence.

Plaintiffs DAK Americas LLC ("DAK"), Indorama Ventures USA, Inc. ("Indorama"), and Nan Ya Plastics Corporation ("Nan Ya") (collectively, "Plaintiffs") are U.S. producers of PET resin -- a polyester polymer (i.e. plastic) material used to make many common products, including bottles. Plaintiffs brought this action against the United States ("the Government") to challenge the International Trade Commission's ("the Commission") Final Determination, Polyethylene Terephthalate Resin From Brazil, Indonesia, Korea, Pakistan, and Taiwan: Determinations, 83 Fed. Reg. 56,377 (Nov. 13, 2018), P.R. 211 ("Final Determination"), in which the Commission determined that an industry in the United States was not materially injured by reason of PET resin imports from Brazil, Indonesia, Korea, Pakistan, and Taiwan ("the subject imports" and "the subject countries"). Plaintiffs had filed antidumping ("AD") petitions with the Commission after subject imports surged following the Commission's 2015 material injury determination on PET resin imports from Canada, China, India, and Oman, and the U.S. Department of Commerce's ("Commerce") subsequently published AD and countervailing duty ("CVD") orders on PET resin imports from those countries. In the determination that Plaintiffs challenge here, the

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Commission found the PET resin market was highly price-sensitive, that subject imports’ market share gains represented domestic industry ceding market share, and that the domestic industry suffered a steep decline in financial condition during the period of investigation ("POI"). Ultimately, however, the Commission concluded: (1) underselling that occurred was not significant given both (i) indirect pricing reports showing overselling was more prevalent and (ii) purchasers’ reports that supply shortages were the cause of domestic market share losses; and (2) subject imports did not have a significant adverse impact on the domestic industry. Plaintiffs challenge the Commission's Final Determination and seek remand from the court.

BACKGROUND

I. Legal and Regulatory Framework

Dumping occurs when a foreign company sells a product in the United States for less than fair value (i.e. for a lower price than in its home market). See Sioux Honey Ass'n v. Hartford Fire Ins. Co., 672 F.3d 1041, 1046 (Fed. Cir. 2012). The International Trade Commission (originally the Tariff Commission) was created by the Revenue Act of 1916 as a nonpartisan, independent quasi-judicial government agency. 39 Stat. 756, 795 (1916) (specifying that no more than three of the Commission's six members can be of the same political party); Tariff Act of 1930, 19 U.S.C. § 1330 (2018) (same) ; cf. USITC, A Centennial History of the USITC 122 (USITC Pub. 4744, Nov. 2017), https://www.usitc.gov/publications/other/centennial (last accessed June 3, 2020). Under the Tariff Act of 1930,⁴ the Commission is tasked with evaluating AD and CVD petitions. 19 U.S.C. §§ 1671, 1673.

The Tariff Act of 1930 allows AD investigations to be initiated by the Commission sua sponte or by petition from interested parties. Id. § 1673a(a)–(b). If by petition, the Commission determines within twenty days of receipt of the petition "whether [it] alleges the elements necessary for the imposition of a duty ... and contains information reasonably available to the petitioner supporting the allegations, and ... if the petition has been filed by or on behalf of the industry." Id. § 1673a(c)(1)(A)(i)–(ii). If the Commission reaches an affirmative determination at this stage, it will then make preliminary determinations as to whether there is a reasonable indication that an industry in the United States is materially injured or threatened with material injury. See id. § 1673b(a)(1)(A)(i)–(ii).

Generally, the Commission will make a final determination whether a domestic industry is materially injured or threatened with material injury within seventy-five days of the preliminary determination. See id. §§ 1673d(a)(1), 1673(b)(1). The statute provides that " ‘material injury’ means harm which is not inconsequential, immaterial, or unimportant" and sets out how the Commission is to evaluate material injury. Id. § 1677(7)(A). It mandates the Commission consider (1) volume of subject imports; (2) effects of subject imports on price for domestic like products; and (3) impact of subject imports on domestic producers of domestic like products. Id. The statute also allows the Commission to consider

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"other economic factors as are relevant to the determination." Id. § 1677(7)(B)(ii).

With regard to impact on the affected domestic industry, the statute takes a broad lens and mandates a highly contextual analysis: "The Commission shall evaluate all relevant economic factors described in this clause within the context of the business cycle and conditions of competition that are distinctive to the affected industry." Id. § 1677(7)(C)(iii) (emphasis added). Among the specific factors the statute mentions as indicators of injury are both loss in sales and in revenues. Id. § 1677(7)(C)(iii)(I). This contextual analysis, and these two factors specifically, may help capture domestic industry's differing potential responses to and corresponding injuries from low-priced imports.⁵

The statute requires the Commission to include in its final determination "an explanation of the basis for its determination that addresses relevant arguments that are made by interested parties who are parties to the investigation or review (as the case may be) concerning volume, price effects, and impact on the industry of imports of the subject merchandise." Id. § 1677f(i)(3)(B).

II. Factual and Procedural History of the Commission's Determination and this Case

Plaintiffs filed an AD petition on September 26, 2017 regarding imports from Brazil, Indonesia, the Republic of Korea, Pakistan, and Taiwan. See Petition for the Imposition of Antidumping Duties: Imports of Certain Polyethylene Terephthalate Resin from Brazil, Indonesia, the Republic of Korea, Pakistan, and Taiwan, Sept. 26, 2017, P.R. 1. On November 13, 2017, the Commission concluded its preliminary investigation, found that there was a reasonable indication that the domestic industry was materially injured because of the subject imports, and initiated the final phase of its investigations. See Polyethylene Terephthalate (PET) Resin from Brazil, Indonesia, Korea, Pakistan, and Taiwan; Determinations, 82 Fed. Reg. 53,523, Nov. 16, 2017, P.R. 82. For the final injury investigation, the Commission defined the POI as the first quarter of 2015 through the first quarter of 2018. See Confidential Views of the Commission in Polyethylene Terephthalate Resin from Brazil, Indonesia, Korea, Pakistan, and Taiwan: Investigation. Nos. 731-TA-1387-1391 (Final) at 4, USITC Pub. 4835 (Nov. 2018), C.R. 342, P.R. 209 ("Views").

The Commission then drafted questionnaires for the final phase. Id. at 33 n.133. No parties objected to the Commission using the four pricing products defined by Petitioners in their petition, and the Commission collected data with those four. See Pet'rs.’ Comments on Draft Questionnaires, Mar. 5, 2019, P.R. 95. Pricing data for the four products covered a substantial

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portion of U.S. shipments of domestic PET resin and subject imports.⁶ See Views at 33–34.

The Commission found that the U.S. PET resin market was highly price-sensitive and characterized by product fungibility, that subject imports’ market share gains came at the same time as the domestic industry lost market...