Fairly Traded Venezuelan Cement v. U.S.

• Decision Date: 28 July 2003
• Docket Number: Court No. 00-12-00547.,No. SLIP OP. 03-95.,SLIP OP. 03-95.
• Citation: 279 F.Supp.2d 1314
• Parties: COMMITTEE FOR FAIRLY TRADED VENEZUELAN CEMENT, Plaintiff, v. UNITED STATES, Defendant, and Cemex Venezuela, S.A.C.A. ("Vencemos"), Defendant-Intervenor.
• Court: U.S. Court of International Trade

279 F.Supp.2d 1314

COMMITTEE FOR FAIRLY TRADED VENEZUELAN CEMENT, Plaintiff, v. UNITED STATES, Defendant, and Cemex Venezuela, S.A.C.A. ("Vencemos"), Defendant-Intervenor.

No. SLIP OP. 03-95.

Court No. 00-12-00547.

United States Court of International Trade.

July 28, 2003.

COPYRIGHT MATERIAL OMITTED

King & Spalding LLP, Amherst, NY (Joseph W. Dorn and Michael P. Mabile), for Plaintiff.

Lyn M. Schlitt, General Counsel; James M. Lyons, Deputy General Counsel; (Robin L. Turner), Office of the General Counsel, United States International Trade Commission, for Defendant.

Manatt, Phelps & Phillips, LLP, Washington, DC (Irwin P. Altschuler, Jeffrey S. Neeley, and Susan M. Schmidt), for Defendant-Intervenor.

OPINION

RIDGWAY, Judge.

In this action, Plaintiff Committee For Fairly Traded Venezuelan Cement ("Venezuelan Cement") contests the five-year "sunset" review determination¹ of the United States International Trade Commission ("Commission") that termination of the suspended antidumping and countervailing duty investigations of gray portland cement and cement clinker² from Venezuela would not likely lead to the continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.³

For the reasons set forth below, Plaintiff's motion for judgment upon the agency record is denied.

I. Background

On May 21, 1991, Venezuelan Cement filed a petition with the Commission and the International Trade Administration of the Department of Commerce ("Commerce"), alleging that an industry in the United States was materially injured or threatened with material injury by reason of gray portland cement and cement clinker imported from Venezuela at less than fair value. Complaint ¶ 7. After conducting preliminary investigations, the Commission determined that there was a reasonable indication that an industry in the United States was being materially injured by reason of imports from Venezuela. See Gray Portland Cement and Cement Clinker from Venezuela, 56 Fed.Reg. 32,589 (July 17, 1991) (import investigation); Gray Portland Cement and Cement Clinker from Venezuela, USITC Pub. 2400, Inv. Nos. 303-TA-21 and 731-TA-519 (July 1991) (prelim. determinations and investigation information). See also Complaint ¶ 7.

Commerce issued affirmative preliminary determinations in its antidumping and countervailing duty investigations of cement from Venezuela. See Gray Portland Cement and Clinker from Venezuela, 56 Fed.Reg. 56,390 (Dep't Commerce Nov. 4,1991) (notice of preliminary determinations of sales at less than fair value) (finding dumping margins for certain Venezuelan exporters: 50.02 % for Cementos Caribe ("Caribe"), 49.20% for Venezolana de Cementos ("Vencemos"),⁴ and 49.26% for "all others"); Gray Portland Cement and Clinker from Venezuela, 56 Fed.Reg. 41,522 (Dep't Commerce Aug. 21, 1991) (preliminary affirmative countervailing duty determination) (finding countervailable subsidies benefitting Caribe and Vencemos). See also Complaint ¶ 7.

Based on suspension agreements with Venezuela, Commerce suspended the antidumping and countervailing duty investigations of gray portland cement and cement clinker from Venezuela. See Gray Portland Cement and Clinker from Venezuela, 57 Fed.Reg. 6706 (Dep't Commerce Feb. 27, 1992) (suspension of antidumping investigation); Gray Portland Cement and Clinker from Venezuela, 57 Fed.Reg. 9242 (Dep't Commerce Mar. 17, 1992) (suspension of countervailing duty investigation). See also Complaint ¶ 9.⁵

Effective January 1, 1995, the Uruguay Round Agreements Act ("URAA"), Pub.L. No. 103-465, 108 Stat. 4809 § 220 (1994), added a requirement in section 751(c) of the Act, which obligates the Commission and Commerce to conduct five-year "sunset" reviews of countervailing duty orders, antidumping orders, and notices suspending investigations. See 19 U.S.C. § 1675(c)(1)(A) (2000).⁶ The present action involves the Commission's determination whether termination of the notices suspending the antidumping and counter-vailing duty investigations "would be likely to lead to continuation or recurrence of dumping or a countervailable subsidy ... and of material injury." 19 U.S.C. § 1675(c)(1)(A) (2000). As stated by the Statement of Administrative Action to the Uruguay Round Agreements Act of 1994 ("SAA"),⁷ a document expressly approved by Congress in relation to the URAA, "[t]he recurrence of material injury standard is prospective in nature." SAA, H.R. Doc. No. 103-316 at 884 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4209. See also Pl.'s Brief at 10.

On August 2, 1999, pursuant to 19 U.S.C. § 1675(c)(1)(A), Commerce and the Commission published their respective notices initiating and instituting its "sunset" review of the suspended antidumping and countervailing duty investigations of subject imports from Venezuela. Gray Portland Cement and Clinker from Japan, Mexico, and Venezuela, 64 Fed.Reg. 41,915 (Dep't Commerce Aug. 2, 1999) (initiation of five-year reviews); Gray Portland Cement and Clinker from Japan, Mexico, and Venezuela, 64 Fed.Reg. 41,958 (Aug. 2, 1999) (institution of five-year reviews). See Complaint ¶ 11.⁸ The Commission published notice of its schedule of reviews and of a public hearing to be held on August 15, 2000 in connection with the reviews. Gray Portland Cement and Cement Clinker from Japan, Mexico, and Venezuela, 65 Fed.Reg. 17,901 (Apr. 5, 2000).⁹ After conducting a regional industry analysis pursuant to 19 U.S.C. § 1677(4)(C), the Commission published notice of its final negative determination that "termination of the suspended investigations on gray portland cement and cement clinker from Venezuela would not be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time." Gray Portland Cement and Cement Clinker from Japan, Mexico, and Venezuela, 65 Fed.Reg. 65,327 (Nov. 1, 2000). See also Commission Views. See generally Complaint ¶ 13.

In a regional industry analysis, the Commission may find "material injury, the threat of material injury, or material retardation of the establishment of an industry ... even if the domestic industry as a whole ... is not injured." 19 U.S.C. § 1677(4)(C) (2000). The Commission must satisfy three prerequisites¹⁰ before reaching an affirmative determination in a regional industry analysis. Texas Crushed Stone Co. v. United States, 17 CIT 428, 432, 822 F.Supp. 773, 777 (1993) ("Texas Crushed Stone I"), aff'd, 35 F.3d 1535 (Fed.Cir.1994) ("Texas Crushed Stone II").¹¹

With respect to the first prerequisite, i.e., a regional industry satisfying the requirements of section 1677(4)(C), the Commission determined that "the record again supports finding three separate regional industries, which correspond, or are similar, to those defined in the original investigations." Commission Views at 17. See generally 19 U.S.C. § 1677(4)(C) (2000). As a result, the Commission found that "a regional industry exists for the State of Florida region." Id. at 23. See also Commission Views at 15-18, 22-23 (discussing and applying the requirements of section 1677(4)(C) for a regional industry).¹²

However, the Commission majority found that the record did not satisfy the second prerequisite, i.e., a concentration of dumped imports into the regional market. See 19 U.S.C. § 1677(4)(C) (2000) (requiring, inter alia, "a concentration of dumped imports or imports of merchandise benefiting from a countervailable subsidy into ... an isolated market"). Instead, it found that "subject imports from Venezuela into the Florida region are not likely to account for a substantial proportion of total U.S. imports of cement from Venezuela in the reasonably foreseeable future if the suspended investigations are terminated." Commission Views at 30. See also Complaint ¶ 20. See generally Commission Views at 26-30.¹³

The Commission then concluded in its prospective analysis that "termination of the suspended ... investigations would not be likely to lead continuation or recurrence of material injury to an industry in the United States, pursuant to [19 U.S.C. § 1675(d)(2)]" and ordered the termination of the suspended investigations on subject imports from Venezuela. Gray Portland Cement and Cement Clinker from Venezuela, 65 Fed.Reg. 68,974 (Dep't Commerce Nov. 15, 2000) (final determination). See Commission Views at 27-30; Complaint ¶ 14. See generally 19 U.S.C. § 1675(d)(2) (2000) (addressing termination of suspended investigations); SAA at 891-92 (same).

While Commissioner Miller determined that there was sufficient evidence to satisfy the import concentration criteria,¹⁴ she declined to cumulate the likely volume and effect of imports from Venezuela and Mexico into Florida if the suspended agreements were terminated. C.D. 193, Separate Views of Commissioner Marcia E. Miller (Oct. 27, 2000) ("Separate Views") at 78-79. See Complaint ¶¶ 27-28.

In its USCIT R. 56.2 motion for judgment upon the agency record, Venezuelan Cement contests the Commission's final negative determination. Specifically, Venezuelan Cement challenges: 1). the Commission majority's finding that subject imports in the Florida region are not likely to satisfy the concentration standard if the suspended antidumping and countervailing duty investigations are terminated; 2). the Commission's finding that subject imports in the Florida region are unlikely to increase in the reasonable future if the suspended investigations are terminated; and 3). Commissioner Miller's decision not to cumulate subject imports from Venezuela and Mexico. Complaint ¶¶ 21, 24, 28-29.

II. Jurisdiction

This action is brought pursuant to 19 U.S.C. § 1516a(a)(2)(A)(i)(1) and 28 U.S.C. § 1581(c).

As a preliminary matter, the Government raises an issue of exhaustion. The Government claims that Venezuelan Cement is barred from arguing that "Congress changed, and in effect lowered, the standard for the import concentration...