Gilmore Steel Corp. v. United States

• Citation: 585 F. Supp. 670,7 CIT 219
• Decision Date: 23 April 1984
• Docket Number: Court No. 84-2-00228.
• Parties: GILMORE STEEL CORPORATION, Plaintiff, v. UNITED STATES, et al., Defendants, Societe Anonyme De Fabrique De Fer De Charleroi, and Societe Anonyme De Forges De Clabecq, Intervenors.
• Court: U.S. Court of International Trade

585 F. Supp. 670

7 CIT 219

GILMORE STEEL CORPORATION, Plaintiff, v. UNITED STATES, et al., Defendants, Societe Anonyme De Fabrique De Fer De Charleroi, and Societe Anonyme De Forges De Clabecq, Intervenors.

Court No. 84-2-00228.

United States Court of International Trade.

April 23, 1984.

Heller, Ehrman, White & McAuliffe, San Francisco, Cal. (John H. Cutler, Rene P. Tatro, and John S. Yun, San Francisco, Cal., on briefs), for plaintiff.

Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Washington, D.C. (Francis J. Sailer, Washington, D.C., on briefs), for defendants.

Robert M. Gottschalk, New York City (Sidney N. Weiss, New York City, on briefs) for intervenors.

Opinion and Order

MALETZ, Senior Judge:

In this action plaintiff Gilmore Steel Corp. challenges the government's rescission of a notice initiating an antidumping proceeding, as well as its dismissal of plaintiff's antidumping petition. The crux of the parties' dispute focuses on the phrase "on behalf of an industry" contained in section 732(b) of the Tariff Act of 1930, as amended by the Trade Agreements Act of 1979, 19 U.S.C. § 1673a(b) (1982). Section 1673a provides in part:

§ 1673a. Procedures for initiating an antidumping duty investigation

* * * * * *

(b) Initiation by petition

(1) Petition requirements

An antidumping proceeding shall be commenced whenever an interested party ... files a petition with the administering authority, on behalf of an industry, which alleges the elements necessary for the imposition of the duty imposed by section 1673 of this title, and which is accompanied by information reasonably available to the petitioner supporting those allegations. The petition may be amended at such time, and upon such conditions, as the administering authority and the Commission may permit. Emphasis added.

The term "industry" is defined in general as

the domestic producers as a whole of a like product, or those producers whose collective output of the like product constitutes a major proportion of the total domestic production of that product.

19 U.S.C. § 1677(4)(A) (1982).

The questions presented are fourfold. First, does "on behalf of an industry" mean "as the representative of an industry," as the government contends; or does it merely refer to the scope of relief sought by the petitioner, i.e., relief which would inure to the benefit of an industry, as Gilmore maintains? Second, does the term "industry" as used in section 1673a(b) refer only to national industries, or does it include regional industries as well? The third inquiry —and in Gilmore's view the overriding question—is whether the Department of Commerce, International Trade Administration (ITA), had the power to dismiss Gilmore's petition well after the 20-day period had run for determining the sufficiency of its petition. See 19 U.S.C. § 1673a(c), discussed infra. Fourth, assuming that certain ex parte communications took place between the ITA and officials of the European Economic Community, what bearing, if any, does that have on the outcome of this action?

As to the first two inquiries, the court believes that a petitioner must present an antidumping petition in a representative capacity, but that it may do so on behalf of either a regional or national industry. The court is also of the view that the ITA had the power to dismiss Gilmore's petition after the 20-day petition determination period of section 1673a(c) had run, insofar as that petition purported to represent the national hot-rolled carbon steel plate industry. However, to the extent Gilmore's petition alleged in the alternative less-than-fair-value (LTFV) sales and injury to a regional industry, it was error for the ITA to dismiss it. And as for the alleged ex parte communications, the court finds any error in that connection harmless.

Accordingly, for the reasons that follow, the ITA's determination is affirmed in part and reversed in part, and the case is remanded for further proceedings consistent with this opinion.

Background

Approximately one year before Gilmore filed its antidumping petition, an eleventh-hour agreement had been reached among the Commerce Department, the major U.S. steel producers, and the European Economic Community (EEC or EC), whereby the EEC agreed to restrict its exports of steel products to the United States in exchange for the U.S. steel industry's commitment to drop all pending antidumping and countervailing duty proceedings against the EC steel producers. See 47 Fed.Reg. 49,058 (Oct. 29, 1982). This agreement, generally referred to as "the Arrangement," was not acceded to by all domestic steel producers, Gilmore being one such nonsignatory. The Arrangement allows for abrogation by the EC producers if any U.S. producer—signatory or nonsignatory—files an antidumping petition respecting EC carbon steel products.

During 1983 Gilmore sustained what it characterizes as a deteriorating business condition due to imports of hot-rolled carbon steel plate in cut lengths (steel plate) from Belgium and West Germany—both EC members. Gilmore therefore petitioned the ITA on September 29, 1983, for initiation of an antidumping investigation pursuant to 19 U.S.C. § 1673a(b)(1). With regard to both the alleged Belgian and West Germany LTFV sales, the petition was brought "on behalf of" all U.S. producers of steel plate. Alternatively, however, with respect to LTFV sales from West Germany, the petition was brought on behalf of a regional industry only, comprising West coast steel plate producers. At the time the petition was filed that regional industry numbered two producers—Kaiser Steel Corp. and Gilmore. By the end of 1983 their number had been winnowed to one, Gilmore being the sole survivor.

Within 20 days of Gilmore's filing the ITA made an affirmative determination under 19 U.S.C. § 1673a(c)¹ that the petition set forth the allegations necessary for imposition of antidumping duties. Notice of the commencement of an investigation was, accordingly, published in the Federal Register on October 25, 1983. 48 Fed.Reg. 49,322. The ITA simultaneously notified the International Trade Commission (ITC) that a preliminary injury investigation should be undertaken. See 19 U.S.C. § 1673a(d). On November 7, 1983, a unanimous ITC rendered an affirmative preliminary injury determination, but only insofar as the national steel plate industry was concerned. There was no regional industry determination by the full ITC. See Determination of the Commission in Investigations Nos. 731-TA-146 and 147 (Preliminary) Under the Tariff Act of 1930, Together with the Information Obtained in the Investigation, USITC Pub. No. 1451 (Nov. 1983) (the ITC Report).

Two months after the ITC Report the ITA published the following notice in the Federal Register, purporting to rescind its earlier notice commencing the investigation, and dismissing Gilmore's petition:

The Department has determined that Gilmore's petition was not filed on behalf of a United States industry and that this earlier initiation was not well founded. This conclusion is based on the following facts, which came to light only after our initial decision to initiate.

At an ITC public conference held on October 26, 1983, Gilmore was the only producer of this merchandise to testify in support of the petition. Conversely, letters were submitted by Armco Inc., to the Department and by United States Steel Corp., to the ITC specifically indicating that these firms do not support Gilmore's petition. Given this absence of support from Armco Inc., and United States Steel Corp., the Department had reason, for the first time, to question whether the petition was, in fact, properly filed on behalf of a domestic industry, and asked other U.S. carbon steel plate producers if they supported Gilmore's petition. Written replies were received from: Bethlehem Steel Corp., Inland Steel Co., Jones and Laughlin Steel Inc., Lukes Steel Co., National Steel Corp., Phoenix Steel Corp., U.S. Steel Corporation and Republic Steel Corp. All of these—except Bethlehem, which did not take a position—indicated that they do not support Gilmore's petition.

49 Fed.Reg. 3503, 3504 (Jan. 27, 1984).

Thus, on the basis of information received after the running of the 20-day period spelled out in 19 U.S.C. § 1673a(c), the ITA reconsidered the sufficiency of and dismissed Gilmore's petition, concluding that it had not been brought "on behalf of an industry" since the petition lacked the support of a majority of domestic steel plate producers. The ITA did not stop there, however. It went one step further, concluding that since only one ITC commissioner had discussed the regional industry issue, the ITC had thereby rendered a negative determination as to the existence of a regional industry. 49 Fed.Reg. 3504. Consequently, Gilmore's entire petition was dismissed.

Having thus been shunted by the ITA, Gilmore brought this present action, requesting a preliminary injunction which, in effect, seeks the ultimate relief sought in its complaint—continuation of the entire investigation. The government has moved for summary judgment. At a consolidated hearing on these two motions, the parties agreed that the matter could be considered as cross-motions for summary judgment.² Compare rule 65(a)(2) of the rules of this court (hearing on preliminary injunction may be combined with trial on merits).

With this factual and legal backdrop, the court addresses the threshold issue: may the ITA, having rendered its determination to commence an antidumping proceeding, reconsider that determination, rescind it, and terminate the investigation in midstream on the basis of information which is neither within the petition nor part of the public domain?

Reconsideration of Decision to Commence Investigation

While comprising three counts of its five-count complaint, Gilmore's contentions regarding the procedural aspects of the dismissal of its petition boil down...