Mitsubishi Heavy Industries, Ltd. v. U.S.

• Decision Date: 19 November 1997
• Docket Number: Court No. 96-10-02298.,Court No. 96-10-02292.,Slip Op. 97-153.
• Citation: 986 F.Supp. 1428
• Parties: MITSUBISHI HEAVY INDUSTRIES, LTD., Plaintiff, v. UNITED STATES, Defendant, and Goss Graphics, Inc., Defendant-Intervenor. KOENIG & BAUER-ALBERT AG, Plaintiff, v. UNITED STATES, Defendant, and Goss Graphics, Inc., Defendant-Intervenor.
• Court: U.S. Court of International Trade

Page 1428

986 F.Supp. 1428

MITSUBISHI HEAVY INDUSTRIES, LTD., Plaintiff, v. UNITED STATES, Defendant, and Goss Graphics, Inc., Defendant-Intervenor.

KOENIG & BAUER-ALBERT AG, Plaintiff, v. UNITED STATES, Defendant, and Goss Graphics, Inc., Defendant-Intervenor.

Slip Op. 97-153.

Court No. 96-10-02292.

Court No. 96-10-02298.

United States Court of International Trade.

November 19, 1997.

Steptoe & Johnson (Anthony J. LaRocca, Julia Court, and Richard O. Cunningham), Washington, DC, for Mitsubishi Heavy Industries, Ltd., Kirkland & Ellis (Kenneth G. Weigel and Nancy Kao), Washington, DC, for Koenig & Bauer-Albert AG and KBA-Motter Corp., for Plaintiffs.

Frank W. Hunger, Assistant Attorney General of the United States, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice; Of Counsel, Robert J. Heilferty and Boguslawa B. Thoemmes, Office of the Chief Counsel for Import Administration, Department of Commerce, and Randi-Sue Rimerman, Department of Justice, Civil Division, Commercial Litigation Branch, Washington, DC, for Defendants.

Wiley, Rein & Fielding (Charles Owen Verrill, Jr., Alan H. Price, and Willis S. Martyn III), Washington, DC, for Defendant-Intervenors.

OPINION

POGUE, Judge.

Plaintiffs, Mitsubishi Heavy Industries ("MHI") and Koenig & Bauer-Albert AG and KBA-Motter Corp. (collectively "KBA") move for judgment on the agency record pursuant to USCIT R. 56.2, challenging the United States Department of Commerce's ("Commerce") final antidumping determination. See Large Newspaper Printing Presses & Components Thereof, Whether Assembled or Unassembled from Japan, 61 Fed. Reg. 38,139 (Dep't. Commerce 1996) (final deter.) ("Japan Final"); Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled from Germany, 61 Fed.Reg. 38,166 (Dep't. Commerce 1996) (final deter.) ("Germany Final"). MHI and KBA object to Commerce's final scope determination, contending that it constitutes an impressible expansion of the scope of the investigation, as defined in Commerce's Notice of Initiation.¹

BACKGROUND

Domestic producer Goss Graphics, Inc.² ("Goss") petitioned Commerce to investigate possible sales at less than fair value of "large newspaper printing presses ... and [five named] press components, whether assembled or unassembled," from Germany and Japan. The petition defined an unassembled press system, addition, or component as "any collection of ... constituent parts, imported for assembly into a press, press addition, or press component, and whether or not combined, ... with constituent parts or components from non-subject sources...." See Antidumping Petition, Public Version (June 30, 1995), Pub. Doc. No. 1, at 6-7.

MHI and other respondents challenged the petition, arguing that petitioner's definition of unassembled presses appeared to include parts or subcomponents of press systems and components and that petitioner had failed to identify the members of the U.S. industry that manufactured those parts or subcomponents. In the Notice of Initiation, ITA addressed respondents' arguments:

[W]e note that the subject merchandise defined in the scope section of this notice clarifies that the domestic like product identified in the petition is limited to large newspaper printing press systems, press additions, and the five named major press system components. The subcomponents and parts identified by MHI are not included in the definition of the domestic like product accepted by the department. As such, there is no issue with respect to domestic producers of printing press subcomponents or parts.

60 Fed.Reg. at 38,546.

The scope definition in the Notice of Initiation was based on the petition. However, to further clarify that parts and subcomponents were not included in the scope of the investigation, Commerce deleted petitioner's language referring to "constituent parts" of a component. Thus, Commerce defined the scope to include "complete LNPP's, additions, and the [five named] press components, regardless of degree of disassembly and/or degree of combination with non-subject elements before or after importation." Id. at 38,547. The parties disagreed on the meaning of this language and requested additional clarification on the scope of the investigation. See Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, From Japan, 61 Fed.Reg. 8,029, 8,031 (Dep't Commerce 1996) (prelim. determ.) ("Japan Prelim."); Large Newspaper Printing Presses and Components Thereof, Whether Assembled or Unassembled, From Germany, 61 Fed.Reg. 8,035, 8,037 (Dep't Commerce 1996) (prelim. determ.) ("Germany Prelim.").

In the preliminary determinations, Commerce "clarified the scope to include elements' (otherwise referred to as `parts' or `subcomponents') of an LNPP system, addition or component, which taken as a whole, constitute a subject LNPP system, addition or component used to fulfill an LNPP contract." Japan Prelim., 61 Fed.Reg. at 8,030; Germany Prelim., 61 Fed.Reg. at 8,036 (emphasis added). Commerce, however, had not defined when a collection of elements "constitutes" an LNPP component and invited comment from the parties. See Japan Prelim., 61 Fed.Reg. at 8,031; Germany Prelim., 61 Fed.Reg. at 8,037. In the final determinations, Commerce defined the scope of its investigation to include parts when those parts are imported to fulfill a contract for an LNPP system and constitute at least 50 percent of the value of the component into which they are incorporated.³ MHI and KBA object to this definition.

DISCUSSION

I. SCOPE AND INDUSTRY SUPPORT

An antidumping investigation may be commenced in one of two ways: an interested party may file a petition alleging the elements necessary for imposition of an antidumping duty, 19 U.S.C. § 1673a(b); or Commerce may self-initiate an investigation. 19 U.S.C. § 1673a(a); 19 C.F.R. § 353.11 (1996). To initiate an investigation in response to a petition, Commerce must "determine whether the petition alleges the elements necessary for the imposition of a duty ..." and "determine if the petition has been filed by or on behalf of the industry," i.e., whether the domestic industry supports the investigation. 19 U.S.C. § 1673a(c)(1)(A).

MHI and KBA argue that Commerce's clarification of the initial scope determination was unlawful under the antidumping statute as amended by the Uruguay Round Agreements Act of 1994 ("URAA").⁴ Specifically, plaintiffs argue that Commerce's discretion to change the scope of an investigation is limited by amendments to the statutory provisions governing the determination of industry support.

Before the URAA took affect, Commerce could presume industry support unless a petition was actively opposed. See NTN Bearing Corp. v. United States, 15 CIT 75, 79, 757 F.Supp. 1425, 1429 (1991). Now, Commerce may not operate on the basis of the presumption, but rather must establish that:

(i) the domestic producers or workers who support the petition account for at least 25 percent of the total production of the domestic like product, and

(ii) the domestic producers or workers who support the petition account for more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for or opposition to the petition.

19 U.S.C. § 1673a(c)(4)(A) (1994). This determination must be concluded within 20 days of the filing of the petition. 19 U.S.C. § 1673a(c)(1)(A). The URAA also says that "[a]fter [Commerce] makes a determination with respect to initiating an investigation, the determination regarding industry support shall not be reconsidered." 19 U.S.C. § 1673a(c)(4)(E) (1994).⁵

MHI and KBA argue that "[t]he definition of the domestic industry is tied to the definition of the domestic like product, which is defined in terms of the subject merchandise." (Mot. of Pls. Mitsubishi Heavy Industries, Ltd., Koenig & Bauer-Albert AG and KBA-Motter Corp. J. Agency Rec. on Scope and Standing Issues (Pls.' Mem.) at 16 n. 61 (citing 19 U.S.C. § 1677(4)(A) (definition of domestic industry)); 19 U.S.C. § 1677(10) (definition of domestic like product)). Therefore, "under the new statute ITA must define the scope of the investigation prior to initiation so that it can determine whether the industry making the products included in the scope support the initiation of an investigation." Id. at 16. Plaintiffs also argue, "the scope cannot be expanded as the investigation proceeds because industry support for a new scope cannot be considered after initiation." Id. Thus, according to plaintiffs, the issue before the Court is Commerce's ability under the URAA to expand the scope of an investigation after initiation. However, the Court need not reach this issue because the Court finds that Commerce did not expand the scope.⁶

In reviewing a final determination, the Court must decide whether Commerce's determination is in accordance with law and whether Commerce's conclusions are supported by substantial evidence on the record. Section 516A(b)(1)(B)(i) of the Tariff Act of 1930, 19 U.S.C. § 1516a(b)(1)(B)(i) (1994).

Certainly if the words of the URAA are to have meaning, they must create a duty to define the domestic like product with enough specificity to conduct a meaningful industry support analysis. Here, the Court finds the steps taken by Commerce were sufficient to define the domestic like product with the requisite degree of specificity and thus to conduct a meaningful industry support analysis. Therefore, Commerce's scope definition was in accordance with its obligations under the URAA.

Commerce based its initial definition of domestic like product on Goss's petition, according to its usual practice. See Kern-Liebers USA, Inc. v. United States, 881 F.Supp. 618, 621 (CIT 1995) ("[T]he agency generally exercises [its] broad discretion to define and clarify the scope of an antidumping investigation in a manner which...