Elkem Metals Co. v. U.S.

• Decision Date: 12 May 2004
• Docket Number: Court No. 99-10-00628.,No. Slip Op. 04-49.,Slip Op. 04-49.
• Citation: 342 F.Supp.2d 1207
• Parties: ELKEM METALS CO., American Alloys, Inc., Applied Industrial Materials Corp., and CC Metals & Alloys, Inc., Plaintiffs, and Globe Metallurgical, Inc., Plaintiff-Intervenor, v. UNITED STATES of America, Defendant, and Ferroatlantica De Venezuela, General Motors Corp., Associaç-ao Brasilera dos Productores de Ferroligas e de Silico Metalico, et al., and Ronly Holdings, Ltd., et al., Defendant-Intervenors.
• Court: U.S. Court of International Trade

342 F.Supp.2d 1207

ELKEM METALS CO., American Alloys, Inc., Applied Industrial Materials Corp., and CC Metals & Alloys, Inc., Plaintiffs, and Globe Metallurgical, Inc., Plaintiff-Intervenor, v. UNITED STATES of America, Defendant, and Ferroatlantica De Venezuela, General Motors Corp., Associaç-ao Brasilera dos Productores de Ferroligas e de Silico Metalico, et al., and Ronly Holdings, Ltd., et al., Defendant-Intervenors.

No. Slip Op. 04-49.

Court No. 99-10-00628.

United States Court of International Trade.

May 12, 2004.

Piper Rudnick, LLP (William D. Kramer, Martin Schaefermeier, Washington, DC), Eckert Seamans Cherin & Mellott, LLC (Dale Hershey, Mary K. Austin, Pittsburgh, PA), and Howrey Simon Arnold & White, LLP (John W. Nields, Jr., Laura S. Shores, Washington, DC) for Plaintiff Elkem Metals Company.

Williams Montgomery & John, Ltd. (Theodore J. Low, Chicago, IL) for Plaintiff Applied Industrial Materials Corporation.

Arent Fox Kintner Plotkin & Kahn, PLLC (George R. Kucik, Eugene J. Meigher, Stephanie Rigaux, Washington, DC, James F. Laboe, Rockville, MD, Kate B. Briscoe), and Thelen Reid & Priest, LLP (Gerald Zingone, Washington, DC) for Plaintiff CC Metals & Alloys, Inc.

Dangel & Mattchen, LLP (Edward T. Dangel, III, Michael K. Mattchen, Boston, MA) for Plaintiff-Intervenor Globe Metallurgical, Inc.

Lyn M. Schlitt, General Counsel, United States International Trade Commission, James M. Lyons, Deputy General Counsel, United States International Trade Commission (Marc A. Bernstein) for Defendant.

Kaye Scholer Fierman Hays & Handler, LLP (Julie C. Mendoza, Donald B. Cameron, R. Will Planert, Margaret Scicluna Rudin Washington, DC) for Defendant-Intervenor Ferroatlantica de Venezuela.

Hogan & Hartson, LLP (Mark S. McConnell, Washington, DC) for Defendant-Intervenor General Motors Corporation.

Greenberg Traurig, LLP (Philippe M. Bruno, Washington, DC) for Defendant-Intervenors Associacao Brasileira dos Productores de Ferroligas e de Silico Metalico, Companhia Brasileira Carbureto de Calcio-CBCC, Companhia de Ferroligas de Bahia-FERBASA; Nova Era Silicon S/A, Italmagnesio S/A-Industria e Comercio, Rima Industrial S/A, and Companhia Ferroligas Minas Gerais-Minasligas.

Aitken Irvin Lewin Berlin & Vrooman, LLP (Bruce Aitken, Virginie Lecaillon, Washington, DC) for Defendant-Intervenors Ronly Holdings, Ltd., Cheliubinski Electrometalurgical Works, Kuznetsk Ferroalloy Works, Stakhanov Ferroalloy Works, and Zaporozhye Ferroalloy Works.

OPINION AND ORDER

EATON, Judge.

This case is before the court following remand to the United States International Trade Commission ("ITC"). In Elkem Metals Co. v. United States, 27 CIT ___, 276 F.Supp.2d 1296 (2003) ("Elkem V"), the court remanded the ITC's negative determination contained in Ferrosilicon from Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, USITC Pub. 3531, Invs. Nos. 303-TA-23, 731-TA-566-570, and 731-TA-641 (Sept.2002), List 1, Doc. 606R ("First Remand Determination"). The ITC expressed its views on remand in Ferrosilicon from Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, USITC Pub. 3627, Invs. Nos. 303-TA-23, 731-TA-566-570, and 731-TA-641 (Sept.2003), List 1, Doc. 620R ("Second Remand Determination"). The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(ii) (2000). For the reasons expressed below, the court sustains the Second Remand Determination in part and remands this matter for further action in conformity with this opinion.

BACKGROUND

In 1998, the ITC was made aware that during its investigations of ferrosilicon, conducted between January 1989 and June 1993, a price-fixing conspiracy existed among three major domestic ferrosilicon producers, namely, plaintiffs Elkem Metals Co., American Alloys, Inc., and SKW Metals & Alloys, Inc. ("SKW"), the predecessor firm to CC Metals & Alloys, Inc. ("CCMA") (collectively, "Plaintiffs" or "Conspirators").¹ This discovery resulted in the ITC's reconsideration, and ultimate reversal, of the affirmative material injury determinations that it had made in 1993 and 1994. See Ferrosilicon from Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela, USITC Pub. 3218, Invs. Nos. 303-TA-23, 731-TA-566-570, and 731-TA-641 (Aug.1999), List 1, Doc. 558AR ("Reconsideration Determination").² Plaintiffs appealed the Reconsideration Determination on procedural and substantive grounds.³

After addressing the procedural issues presented, the court addressed the merits of Plaintiffs' challenge in Elkem V. There, the court held that the ITC's use of best information available ("BIA"), under the pre-URAA version of 19 U.S.C. § 1677e(c)⁴ was in accordance with law, and it sustained, as supported by substantial evidence, the finding that declines in domestic prices between 1989 and 1991 were attributable to the business cycle of ferrosilicon.⁵ Elkem V, 27 CIT at ___, 276 F.Supp.2d at 1305, 1307 — 08. The court also held that the ITC's decision to make adverse inferences was in accordance with law,⁶ and it sustained, as supported by substantial evidence, the adverse inference that the conspiracy affected prices during the Conspiracy Period.⁷ Id., 27 CIT at ___, 276 F.Supp.2d at 1311. The court further found, however, that substantial evidence did not support the ITC's adverse inference that the price-fixing conspiracy affected prices outside the Conspiracy Period. Accordingly, the court instructed the ITC to

revisit its finding with respect to the time period outside of the Conspiracy Period. If it should conclude that its findings on remand with respect to this period are justified it shall: (1) state with specificity the evidence that the price-fixing conspiracy affected prices during the entire Original POI; (2) weigh the evidence in the record concerning those portions of the Original POI where the conspiracy was not judicially found to be operative; and (3) explain with specificity what information in the record, if any, supports the adverse inference made on remand that the conspiracy affected prices during the periods preceding and following the Conspiracy Period.

Id., 27 CIT at ___, 276 F.Supp.2d at 1315 — 16.

In its Second Remand Determination, the ITC revisited its finding that the price-fixing conspiracy affected domestic prices of ferrosilicon outside the Conspiracy Period and modified that finding. See Second Remand Determination at 14 ("In our 2002 determination, we found that a significant condition of competition affecting domestic ferrosilicon prices throughout the original periods of investigation was the price fixing conspiracy.... [W]e have modified this finding to comply with the CIT's instructions in [Elkem V]."). As a result, with respect to the Prior Period, the ITC found that the conspiracy did not affect prices. Id. at 14 & n. 47. With respect to the Subsequent Period, it found that the conspiracy did affect prices. Id. at 14 ("We now find that a significant condition of competition was that the price fixing conspiracy had effects on prices charged by U.S. ferrosilicon producers during the Conspiracy Period and the Subsequent Period.").

In reaching its modified conclusions, the ITC determined that it would use BIA to ascertain how prices were established during the Subsequent Period, reasoning that "[t]he considerations that led the CIT to conclude that `[t]here is little doubt that the use of BIA was warranted under the circumstances presented here,' support[ed] use of BIA" on remand. Second Remand Determination at 7 (quoting Elkem V, 27 CIT ___, 276 F.Supp.2d at 1304). The ITC identified two evidentiary bases for its finding that the conspiracy affected prices during the Subsequent Period. Specifically, the ITC considered: (1) its finding "that the conspiracy was a significant condition of competition affecting prices during the Conspiracy Period," and (2) "the pricing information in the record." Id. at 9.

As to its findings with respect to the Subsequent Period, the ITC recalled the court's finding in Elkem V that substantial evidence supported the adverse inference that the price-fixing conspiracy affected prices during the Conspiracy Period. See Second Remand Determination at 4. The ITC thus "compare [d] the prices that domestic ferrosilicon producers charged during the latter portion of the Conspiracy Period [where the conspiracy was found to be a significant condition of competition] with those charged during the Subsequent Period."⁸ Id. at 9. The purpose of this comparison was to "examine whether prices for the Subsequent Period solely reflected market forces and represent the prices the producers would have charged during the Subsequent Period in the absence of any price-fixing scheme during the Conspiracy Period." Id.

In making this comparison, the ITC examined pricing data compiled by the Commission staff for the last two quarters of the Conspiracy Period and selected quarters of the Subsequent Period. See Second Remand Determination at 9. Upon examination of such data, it concluded that "there are no significant differences in pricing patterns between the latter part of the Conspiracy and the Subsequent Period," id. at 10, and thus that the effects of the price-fixing conspiracy continued after the conspiracy had ended.⁹

In addition, the ITC found that the volume, price effects, and impact of subject imports were not significant. See Second Remand Determination at 14 — 16. The ITC also adopted the negative threat determination from its First Remand Determination. See id. at 14 n. 48. Therefore, the ITC reaffirmed its determination that the domestic ferrosilicon industry was neither materially injured, nor threatened with material injury, by reason of imports of ferrosilicon from Brazil, China, Kazakhstan, Russia, Ukraine, and Venezuela.

For the reasons set forth below, the court sustains the ITC's finding that the price-fixing conspiracy did not affect prices during the Prior Period, but does not sustain...