Int'l Indus., Ltd. v. United States

• Decision Date: 09 April 2018
• Docket Number: Court No. 17–00010,Slip Op. 18–39
• Citation: 311 F.Supp.3d 1325
• Parties: INTERNATIONAL INDUSTRIES, LTD., Plaintiff, v. UNITED STATES, Defendant, and Wheatland Tube Company, Bull Moose Tube Company, Defendant–Intervenors.
• Court: U.S. Court of International Trade

311 F.Supp.3d 1325

INTERNATIONAL INDUSTRIES, LTD., Plaintiff,

v. UNITED STATES, Defendant,andWheatland Tube Company, Bull Moose Tube Company, Defendant–Intervenors.

Slip Op. 18–39

Court No. 17–00010

United States Court of International Trade.

Dated: April 9, 2018

R. Will Planert, Morris, Manning & Martin LLP, of Washington, DC, argued for Plaintiff. With him on the brief were Julie C. Mendoza, Donald B. Cameron, Brady W. Mills, Mary S. Hodgins, Eugene Degnan, and Sarah S. Sprinkle.

Nataline Viray–Fung, Attorney, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, argued for Defendant. With her on the brief were Dominic L. Bianchi, General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.

John W. Bohn, Schagrin Associates, of Washington, DC, argued for Defendant–Intervenors. With him on the brief was Roger Schagrin.

OPINION

Barnett, Judge:

Plaintiff International Industries, LTD ("Plaintiff" or "IIL") moves, pursuant to United States Court of International Trade ("USCIT") Rule 56.2, for judgment on the agency record, challenging the United States International Trade Commission's ("ITC" or "Commission" or "Defendant") determination that circular welded carbon-quality steel pipe ("CWP") imports from Pakistan are eligible for cumulation with CWP imports from Oman and the United Arab Emirates ("UAE").¹ See Confidential Mot. of Pl. International Industries, Ltd. for J. Upon the Agency R. ("Pl.'s Mot."), ECF No. 30; Circular Welded Carbon–Quality Steel Pipe from Oman, Pakistan, the United Arab Emirates, and Vietnam , 81 Fed. Reg. 91,199 (ITC Dec. 16, 2016) (final determinations) ("ITC Final Determination ")² ; Circular Welded Carbon–Quality Steel Pipe from Oman, Pakistan, the United Arab Emirates, and Vietnam, Confidential Final Consolidated Staff Report and Views , Inv. Nos. 701–TA–549 and 731–TA–1299–1300, 1302–1303 (Final) (Dec. 2016), CR 398, ECF No. 20–1.³ Plaintiff challenges the Commission's determination as unsupported by substantial evidence and otherwise not in accordance with law. Confidential Br. of Pl. International Industries, Ltd. in Supp. of its Mot. for J. on the Agency R. ("Pl.'s Br.") at 2, ECF No. 30–1. Specifically, Plaintiff argues that the Commission lacked substantial evidence to support its finding that there was a reasonable overlap between CWP from Pakistan and other CWP, that the Commission did not adequately address Plaintiff's arguments, and that any competition between CWP from Pakistan and other CWP was attenuated. See Pl.'s Mot. at 1–2; Pl.'s Br. at 2–3; see also Confidential Reply of Pl. International Industries, Ltd. ("Pl.'s Reply") at 2, ECF No. 44. Defendant and Defendant–Intervenors support the ITC's cumulation determination. See Confidential Resp. of Def–Ints. Wheatland Tube Co. and Bull Moose Tube Co. to Pl.'s Mot. for J. on the Agency R. Under USCIT Rule 56.2 ("Def.–Ints.' Resp."), ECF No. 32; Confidential Def. United States International Trade Commission's Mem. in Opp'n to Pl.'s Mot. for J. on the Agency R. ("Def.'s Resp."), ECF No. 42. For the reasons discussed below, the Court denies Plaintiff's motion for judgment on the agency record.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012),⁴ and 28 U.S.C. § 1581(c) (2012). The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

I. Legal Standard for Cumulation

The Commission is required to "cumulatively assess the volume and effect of imports of the subject merchandise from all countries" when, as here, petitions are filed on the same day "if such imports compete with each other and with domestic like products in the [U.S.] market." 19 U.S.C. § 1677(7)(G)(i) ; Views at 20 (stating the date of petitions). To determine whether imports compete with each other and with the domestic like product, the Commission analyzes four factors:

(1) the degree of fungibility between subject imports from different countries and between subject imports and the domestic like product, including consideration of specific customer requirements and other quality related questions;(2) the presence of sales or offers to sell in the same geographic markets of subject imports from different countries and the domestic like product;

(3) the existence of common or similar channels of distribution for subject imports from different countries and the domestic like product; and

(4) whether the subject imports are simultaneously present in the market.

Views at 20 (citation omitted). This court and the U.S. Court of Appeals for the Federal Circuit ("CAFC") have approved the Commission's use of these criteria for determining whether competition exists between and among subject imports and the domestic like product. See Goss Graphics Sys., Inc. v. United States , 22 CIT 983, 985, 33 F.Supp.2d 1082, 1085 (1998), aff'd , 216 F.3d 1357, 1361 (Fed. Cir. 2000) ; see also Fundicao Tupy S.A. v. United States , 12 CIT 6, 10–11, 678 F.Supp. 898, 902 (1988) (summarizing the factors as "the fungibility and similar quality of the imports, the similar channels of distribution, the similar time period involved, and the geographic overlap of the markets"), aff'd, 859 F.2d 915 (Fed. Cir. 1988).⁵ No one factor in the Commission's analysis is determinative. Noviant OY v. United States , 30 CIT 1447, 1461, 451 F.Supp.2d 1367, 1379 (2006). Moreover, the Commission need only find that a "reasonable overlap" of competition exists; a finding of " ‘complete overlap’ of competition" is not required to support a cumulation decision. Mukand Ltd. v. United States , 20 CIT 903, 909, 937 F.Supp. 910, 916 (1996) (quoting Wieland Werke, AG v. United States , 13 CIT 561, 563, 718 F.Supp. 50, 52 (1989) ); see also Goss Graphics , 216 F.3d at 1362 (stating that the ITC's inquiry is "whether ‘reasonable overlap’ of competition exists.").

II. The Commission's Determination

The Commission's determination to cumulate subject imports from Pakistan with imports from Oman and the UAE was by a divided vote of the six-member Commission.⁶ For purposes of its material injury analysis, the Commission cumulated subject imports from Pakistan, Oman, and the UAE because it found a "reasonable overlap in competition" among imports from those countries and between those imports and the domestic like product. Views at 26.

The Commission found that the record indicates a geographic overlap in the presence of sales of the CWP imports from Oman, Pakistan, the UAE, and the domestic like product; that there is an overlap in channels of distribution for imports from the subject countries and the domestic like product; that the imports from each subject country were simultaneously present in the U.S. market; and that the imports from the subject countries and the domestic like products are fungible. Views at 22–26. Plaintiff challenges only the ITC's findings with respect to the fungibility analysis; it does not challenge the Commission's methodology or its findings related to the remaining factors. See generally Pl.'s Br.; Pl.'s Reply at 3.

III. Substantial Evidence Supports the Commission's Decision to Cumulate Imports from Pakistan

Plaintiff argues that the Commission's determination is unsupported by substantial evidence because CWP imports from Pakistan constituted a very small percentage share of the total U.S. market and were confined to a small segment—fence tubing—of the overall U.S. market. Pl.'s Br. at 21–24. Plaintiff asserts that the Commission failed to articulate whether it based its cumulation decision on competition in the fence tubing segment or the CWP market as a whole. Id. at 20; Pl.'s Reply at 4. Plaintiff further argues that the Commission failed to address Plaintiff's arguments that the lack of hydrostatic testing, certification pursuant to the American Society for Testing and Materials International ("ASTM") standards, and lead-free certification pursuant to the Safe Drinking Water Act confined Pakistani CWP to the fence tubing submarket. Pl.'s Br. at 31. Plaintiff further argues that the Commission "ignored" evidence that, even within the fence tubing segment, competition between Pakistani imports and the domestic like product was "significantly attenuated" due to quality and specification differences. Id. at 34–40.

Because Plaintiff only challenges the Commission's fungibility determination, the court's analysis is confined to this issue. The Commission "need only find a reasonable overlap of fungibility to support its competition finding." Noviant OY , 30 CIT at 1461, 451 F.Supp.2d at 1379 (quoting Mukand , 20 CIT at 909, 937 F.Supp. at 910 ). Here, the Commission found "at least moderate interchangeability among imports from Oman, Pakistan and the UAE and between the imports from each of those sources and the domestic like product." Views at 23. Contrary to Plaintiff's arguments that Pakistani CWP is not fungible with other imported and domestic like products, substantial evidence on the record supports the Commission's determination of a reasonable degree of fungibility between CWP from Pakistan, the other subject sources and the domestic like product.

Questionnaire responses from market participants regarding interchangeability of CWP imports from Pakistan, Oman, the UAE and domestically produced CWP support a finding of fungibility among these products. During its investigation, the Commission asked market participants to explain whether imported CWP from the subject countries and domestically produced CWP is "always, frequently, sometimes, or never" interchangeable. Staff Report at II–32. Substantial numbers of responding domestic producers, importers, and purchasers reported that CWP from Oman, Pakistan, and the UAE was "always" or "frequently" interchangeable with other subject merchandise or the domestic like...