Maine Potato Council v. United States

• Decision Date: 17 September 1985
• Docket Number: Court No. 84-1-00141.
• Citation: 617 F. Supp. 1088
• Parties: The MAINE POTATO COUNCIL, Plaintiff, v. The UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

617 F. Supp. 1088

The MAINE POTATO COUNCIL, Plaintiff, v. The UNITED STATES, Defendant.

Court No. 84-1-00141.

United States Court of International Trade.

September 17, 1985.

Heron, Burchette, Ruckert & Rothwell, Thomas A. Rothwell, Jr., James M. Lyons and Alfred G. Scholle, Washington, D.C., for plaintiff.

Lyn M. Schlitt, Gen. Counsel, Michael P. Mabile, Asst. Gen. Counsel, U.S. Intern. Trade Com'n and Stephen A. McLaughlin, Washington, D.C., for defendant.

OPINION AND ORDER

RESTANI, Judge:

Plaintiff, the Maine Potato Council, challenges as unsupported by substantial evidence and otherwise not in accordance with the law, the final negative injury determination by the United States International Trade Commission (ITC or Commission) involving imports of fall-harvested round white potatoes from Canada. See Fall-Harvested Round White Potatoes from Canada, 48 Fed.Reg. 57,381 (Inv. No. 731-TA-124 (Final), USITC Pub. No. 1463) (Dec. 29, 1983). On June 27, 1985, this court remanded certain issues to the ITC for further consideration. Maine Potato Council v. United States, 9 CIT ___, 613 F.Supp. 1237 (1985). Specifically, the Commission was instructed to: (1) explain how it treated the issue of quality differences between Canadian and Maine potatoes in finding no price suppression by reason of the imported potatoes and no underselling and how such findings led to the final decision regarding injury, and (2) to state whether it finds that imports were a contributing cause of injury and how that finding relates to data on volume effects. The Commission subsequently reconsidered these issues in light of all the information of record and submitted additional findings to the court on July 25, 1985.¹

For the following reasons, the court concludes that there is substantial evidence in the administrative record supporting the ITC's negative injury determination and that the determination is otherwise in accordance with the law.

First, it is the view of the court that where the Commission finds quality differences significant, it must account for such differences in its analysis. Nonetheless, the Commission persists in its view that perceived quality differences need never be quantified and cites as support British Steel Corp. v. United States, 8 CIT ___, 593 F.Supp. 405, 412 (1984). Plaintiffs in British Steel sought reversal of a finding of underselling, maintaining that costs associated with long lead times for deliveries of the imports offset the lower price of British steel. The court held that an adjustment to actual selling price for those particular cost factors was inappropriate largely because the costs varied according to numerous factors. British Steel, 593 F.Supp. at 412. Thus, British Steel did not involve quality differences, let alone consistently significant quality differences, and the discussion of costs related to underselling only, not to price suppression.

With the legal standard previously set forth in mind, the court must analyze the Commission's actions here. The Commission states that it did make allowances for quality differences in drawing its conclusions regarding price suppression and underselling, although it did not quantify the differences. Therefore, the remaining issue as to quality is whether the differences must be quantified in this case. Initially, it should be noted that no one has proposed a methodology for quantification here. Although the Commission's counsel once stated that quantification was possible, the Commission now states that quantification would be speculative because prices and margins of underselling fluctuate greatly and because the quality differences under discussion reflect consumer preferences only. These reasons are not highly persuasive. Fluctuations make quantification difficult, not impossible, and there remains the possibility that consumer perception influenced the price of potatoes throughout the chain of sale, as some of the lost sales questionnaire responses seem to indicate. The court concludes, however, that quantification is not necessary, in this instance, for other reasons noted by the Commission. The Commission indicates that there was a wide fluctuation in margins of overselling, which the Commission believes is incompatible with plaintiff's theory that consistent quality differences created a ceiling effect on prices. The Commission also indicates that it did not, in fact, find that consistent external quality differences were a significant factor here. Rather, the Commission found these quality differences to be marginal. Such views are not inconsistent with the evidence. Although some witnesses indicated Prince Edward Island potatoes were externally of superior quality, not all lost sales questionnaires reflect this view. Furthermore, those questionnaire respondents who expressed views on quality were not consistent as to which external quality factors— tint, uniform size, or lack of external defects —existed.² This data and the data on the margins of overselling indicates that the Commission did not proceed in an unlawful manner in failing to quantify the perceived external quality differences.

Second, the Commission has now clarified that it does not find the Canadian imports to be any contributing part of the cause of material injury to the domestic industry. In connection with this finding, the court asked for the Commission's views on volume effects on prices in general and specifically in connection with the Commission's econometric study. This study covered a twenty-five year period and indicated that there was a significant inverse correlation between domestic production and prices throughout that period. The study also showed an inverse correlation between imports and prices. The latter correlation, however, was not found to be significant with a certainty of 95 percent. Although neither courts nor administrative agencies need require this degree of certainty, this is often what statisticians require in order to find a significant correlation. See Ethyl Corp. v. Environmental Protection Agency, 541 F.2d 1, 28 & n. 58 (D.C.Cir.1976); see also M. Hamburg, Statistical Analysis for Decision Making at 265 (2d ed. 1977). The Commission is not required to accept data which in the course of ordinary scientific research...