Diamond Sawblades Mfr.S Coal. v. United States

• Decision Date: 06 July 2010
• Docket Number: 2009-1275.,No. 2009-1274,2009-1274
• Citation: 612 F.3d 1348
• Parties: DIAMOND SAWBLADES MANUFACTURERS COALITION, Plaintiff-Appellee,v.UNITED STATES, Defendant-Appellee,v.Saint Gobain Abrasives, Inc., Defendant-Appellant,andEHWA Diamond Industrial Co., Ltd., Defendant-Appellant,andShinhan Diamond Industrial Co., Ltd., Defendant.
• Court: U.S. Court of Appeals — Federal Circuit

612 F.3d 1348

DIAMOND SAWBLADES MANUFACTURERS COALITION, Plaintiff-Appellee,

v.UNITED STATES, Defendant-Appellee,

v.Saint Gobain Abrasives, Inc., Defendant-Appellant,andEHWA Diamond Industrial Co., Ltd., Defendant-Appellant,

and

Shinhan Diamond Industrial Co., Ltd., Defendant.

Nos. 2009-1274, 2009-1275.

United States Court of Appeals, Federal Circuit.

July 6, 2010.

Daniel B. Pickard, Wiley Rein LLP, of Washington, DC, argued for plaintiff-appellee. With him on the brief was Maureen E. Thorson.

Charles A. St. Charles, Attorney, Office of the General Counsel, United States International Trade Commission, of Washington, DC, argued for defendant-appellee United States. With him on the brief were James M. Lyons, General Counsel, and Neal J. Reynolds, Assistant General Counsel.

Lynn M. Fischer Fox, Fischer Fox Global, PLLC, of Washington, DC, argued for defendant-appellant Saint-Gobain Abrasives, Inc.

Jarrod M. Goldfeder, Akin Gump Strauss Hauer & Feld LLP, of Washington, DC, argued for defendant-appellant Ehwa Diamong Industrial Co., Ltd. With him on the brief were Spencer S. Griffith, J. David Park and Lisa W. Ross.

Before BRYSON, LINN, and DYK, Circuit Judges.

Opinion for the court filed by Circuit Judge LINN. Opinion dissenting-in-part filed by Circuit Judge DYK.

LINN, Circuit Judge.

This is an antidumping case. Saint Gobain Abrasives, Inc. (“Saint Gobain”) and Ehwa Diamond Industrial Co., Ltd. (“Ehwa”) (collectively, “Appellants”) challenge two decisions of the Court of International Trade. Both decisions reviewed final determinations of the International Trade Commission (“ITC” or “Commission”) on material injury to a domestic industry by reason of imports of sawblades and parts thereof from Korea and China. First, Appellants challenge a Court of International Trade decision remanding for further consideration an original Commission determination that there was neither material injury nor threat of material injury to the domestic diamond sawblade industry. Diamond Sawblades Mfrs. Coal. v. United States, No. 06-00247, 2008 WL 576988 (Ct. Int'l Trade Feb. 6, 2008) (“ DSMC I ”). Second, Appellants challenge a Court of International Trade decision sustaining the Commission's determination on remand, which affirmed its original negative finding as to present material injury, but found that there was a threat of material injury to the domestic industry. Diamond Sawblades Mfrs. Coal. v. United States, No. 06-00247, 2009 WL 289606 (Ct. Int'l Trade Jan. 13, 2009) (“ DSMC II ”). Because the Court of International Trade did not abuse its discretion when it ordered the remand in DSMC I and because it correctly found that the Commission's determination on remand was supported by substantial evidence in DSMC II, we affirm the Commission's affirmative finding that imports of sawblades and parts thereof from China and Korea pose a threat of material injury to the domestic industry.

Background

Diamond sawblades are circular cutting tools with a diamond-impregnated cutting surface, or blade, used primarily to cut materials such as cement, marble, brick, tile, and stone. Because various characteristics of the sawblades affect how much the finished product will cost and how it will be used, domestic producers and importers collectively offer thousands of different variations of diamond sawblades. The primary differentiating characteristics are the type of blade rim, the diameter of the blade, and the method of attaching the blade to a metal core. There are two types of blade rims-segmented and continuous. While there is some overlap between the two, segmented blades are more often employed in high-volume construction projects. The blades typically range in diameter from 4 inches to 70 inches. Sawblades greater than 20 inches in diameter are typically custom-made for professional use in commercial construction. These large sawblades often require quick turnaround from order to delivery and customer service from the manufacturer in the field. Sawblades with diameters less than 20 inches are generally produced in larger quantities for contractors and individual consumers. Finally, there are three primary ways to attach a blade to a metal core-laser-welding, soldering, and sintering. Laser-welding is generally used to produce segmented blades for use in hand-held saws, soldering is mostly used for specialized commercial projects, and sintering is primarily used for continuous rim blades with smaller diameters. The domestic diamond sawblade market is supplied by three sources: domestic producers, imports from the subject countries of Korea and China, and imports from other countries.

On May 3, 2005, the Diamond Sawblades Manufacturers Coalition and its nine individual members (“DSMC”) filed a petition with the Commission alleging that its defined industry in the United States had been harmed by finished diamond sawblades and diamond sawblade parts imported from China and Korea (“subject imports”) and sold in the United States at “Less Than Fair Value” (“LTFV”). The petition sought the imposition of antidumping duties against the subject imports. After affirmative preliminary findings by the Department of Commerce that the imports in question were indeed being sold at LTFV, the Commission commenced an investigation to determine whether the imports had caused or threatened to cause a material injury to an industry in the United States. This investigation covered the period from 2003 to 2005.

I. The Commission's Original Determination

In conducting its investigation, the Commission compiled relevant data, sent out questionnaires to domestic producers and importers of diamond sawblades, and held hearings. Despite the wide variety of diamond sawblades, the Commission determined that there was a single domestic product most similar in characteristics and uses to the foreign articles under investigation (“domestic like product”) consisting of all diamond sawblades. Because it found that there was “at least a reasonable overlap of competition between and among subject imports from China, subject imports from Korea, and the domestic like product,” the Commission aggregated the subject imports for purposes of its price effect and volume analysis. Diamond Sawblades and Parts Thereof from China and Korea, Inv. Nos. 731-TA-1092-1093 (Final), USITC Pub. 3862, slip op. at 24 (July 2006) (“ Original Determination ”).

In its Original Determination, the Commission found that during the period of investigation the volume of subject imports significantly increased, the subject imports significantly undersold the domestic like product, and the domestic industry lost market share. However, it found that this increase in volume and underselling did not have a significant effect on prices for the domestic product. In addition, the Commission noted that the condition of the domestic industry was largely positive: the industry remained profitable, the industry's capacity to produce diamond sawblade cores increased, and aggregate capital expenditures increased over the period of investigation. This lack of negative adverse effects was attributed to the Commission's finding that competition between the subject imports and the domestic like product was limited by differences in: (1) the type of end user to which sales are made; (2) the diameters of blades sold; and (3) differences in blade type and manufacturing process. The Commission found that the “large and growing volume of subject imports was largely concentrated in size ranges and customer types other than those served principally by the domestic industry.” Id. at 32. Specifically, the Commission found that subject imports had been focused on the demand for smaller diameter, general use sawblades (“nearly half” of subject importer's U.S. shipment value was for sawblades less than 10 inches in diameter), while domestic producers were focused on the demand for larger diameter, professional-use sawblades used in commercial construction (“nearly half” of U.S. shipments were in sizes 14 inches and larger). The Commission also noted that a “significant” percentage of the import sales were of sintered or continuous rim sawblades and a “significant” percentage of the domestic industry's sales consisted of soldered or brazed segmented products. Finally, the Commission found that import sales were directed primarily to “branded” distributors who sold to both end users and retailers, and that U.S. producer sales were primarily to “other distributors” and end users. Based on these findings of market segmentation and limited competition, the Commission found that there was “no causal nexus between the subject imports and the condition of the domestic industry.” Id. at 38.

The Commission listed the following facts in support of its conclusion that there was a lack of negative price effect on domestic products despite significant underselling: (1) the importance of non-price factors-availability, delivery time, product consistency, product quality, and reliable supply; (2) the increase in price for the domestic product during the period in certain instances; (3) the decrease in price for the domestic product even when subject import prices for that product increased or remained the same in certain instances; and (4) the fact that in 12 of 17 combinations in which U.S. producers' prices trended downward, these decreases were accompanied by increased volumes of the U.S. product-a “price/volume” tradeoff. The commissioners unanimously concluded that the domestic diamond sawblade industry was not materially injured by reason of subject imports from China and Korea.

Four of the six commissioners also concluded that the domestic industry was not threatened with material injury by reason of subject imports from China and Korea. The majority based its conclusion on the strong overall demand for diamond sawblades in the U.S. market, the limited competition with subject imports, and the sturdy financial performance of the domestic...