Neenah Foundry Co. v. U.S.

• Decision Date: 25 June 2001
• Docket Number: No. 99-11-00716.,SLIP OP. 01-77.,99-11-00716.
• Citation: 155 F.Supp.2d 766
• Parties: NEENAH FOUNDRY CO. et al., Plaintiffs, v. UNITED STATES OF AMERICA and the United States International Trade Commission, Defendants, and Bengal Export Corporation et al., Intervenor-Defendants.
• Court: U.S. Court of International Trade

155 F.Supp.2d 766

NEENAH FOUNDRY CO. et al., Plaintiffs, v. UNITED STATES OF AMERICA and the United States International Trade Commission, Defendants, and Bengal Export Corporation et al., Intervenor-Defendants.

SLIP OP. 01-77.

No. 99-11-00716.

United States Court of International Trade.

June 25, 2001.

Collier Shannon Scott, PLLC, Washington, DC (Paul C. Rosenthal, Robin H. Gilbert, Kathleen W. Cannon and Lynn Duffy Maloney) for the plaintiffs.

Lyn M. Schlitt, General Counsel, James A. Toupin, Deputy General Counsel, and Charles A. St. Charles, Attorney-Advisor, Washington, DC, for the defendant United States International Trade Commission.

Cameron & Hornbostel LLP, Washington, DC (Dennis James, Jr.) for the intervenor-defendants.

Opinion & Order

AQUILINO, Judge.

This action contests the "sunset-review" determination of the International Trade

Commission ("ITC") pursuant to 19 U.S.C. § 1675(c)(1) (1995) that

revocation of the countervailing duty order on iron metal castings from India 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.

Iron Metal Castings From India; Heavy Iron Construction Castings From Brazil; and Iron Construction Castings From Brazil, Canada, and China, 64 Fed.Reg. 58,442 (Oct. 29, 1999). This decision caused the International Trade Administration, U.S. Department of Commerce ("ITA") to publish its notice of Revocation of Countervailing Duty Order: Iron Metal Castings From India, 64 Fed.Reg. 61,602 (Nov. 12, 1999), prior to which the same plaintiffs as appear herein had commenced a separate action for judicial review of the final results of the ITA's sunset review. See generally Neenah Foundry Co. v. United States, 25 CIT ____, 142 F.Supp.2d 1008 (2001).

I

The ITC rendered the foregoing determination qua India over the dissents of two of its six voting members. Those comprising the majority refused to cumulate the imports from that land with the merchandise from Brazil, Canada and China, notwithstanding contrary Commission resolution of the reviews of all the other duty orders covering castings from those three nations. See 64 Fed.Reg. at 58,442. Chairman Bragg and Commissioners Crawford and Askey concluded that

revocation of the order with respect to heavy construction castings from India would have no discernible adverse impact on the U.S. industry and, therefore, do not cumulate subject heavy construction castings from India with the subject heavy iron construction castings from Canada, Brazil or China.

Iron Metal Castings From India; Heavy Iron Construction Castings From Brazil; and Iron Construction Castings From Brazil, Canada, and China, USITC Pub. 3247, pp. 12-13 (Oct.1999). The fourth commissioner, Stephen Koplan, did not join in this finding of "no discernible adverse impact on the U.S. industry" but did decline to cumulate the imports based on his analysis of relevant conditions of competition.

The plaintiffs now argue in their motion for judgment upon the agency record filed pursuant to CIT Rule 56.2 that this action "raises several important issues of first impression concerning certain commissioners' interpretations of the cumulation provision applicable in `sunset' revocation proceedings", to wit:

... In exercising his discretion ... under the guise of considering "conditions of competition," Commissioner Koplan conducted an unlawful circular analysis of the effects of the imports on an individual-country basis in a manner that mooted the principle of cumulation....

* * * * * *

Likewise, Commissioner Askey analyzed cumulation in a manner contrary to the statute. Although the statute precludes the Commission from cumulating when it finds that imports are likely to have "no" discernible adverse impact, Commissioner Askey has wrongly interpreted this provision to mean that she may cumulate only when the record shows that imports will have "a" discernible adverse impact. As a result, Commissioner Askey has at once raised the burden for cumulating, altered the statutory standard, and created a precondition for cumulation that Congress did not intend....

Commissioner Crawford, too, has erred in her decision not to cumulate. In particular, [she] violated basic tenets of administrative law by failing to adequately explain her reasons not to cumulate, stating in one instance simply that she "declined to exercise her discretion to cumulate" imports from Brazil and China with the remaining imports and providing no further explanation....

Plaintiffs' Rule 56.2 Brief, pp. 9-11.

A

The court's jurisdiction to decide this action is pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. §§ 1581(c), 2631(c). And, whatever the issues raised herein, the ITC's determination must be affirmed unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law". 19 U.S.C. § 1516a(b)(1)(B)(i). Moreover, the rule has been that, in

reviewing an agency's construction of a statute that it administers, this court addresses two questions outlined by the Supreme Court in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 ... (1984). The first question is "whether Congress has directly spoken to the precise question at issue." Id. at 842, 104 S.Ct. 2778 .... If so, this court and the agency "must give effect to the unambiguously expressed intent of Congress." Id. at 843, 104 S.Ct. 2778 .... If, however, Congress has not spoken directly on the issue, this court addresses the second question of whether the agency's interpretation "is based on a permissible construction of the statute." Id.

"To survive judicial scrutiny, an agency's construction need not be the only reasonable interpretation or even the most reasonable interpretation." Koyo Seiko [Co. v. United States], 36 F.3d [1565,] 1570 [Fed.Cir.1994]. Thus, when faced with more than one reasonable statutory interpretation, "a court must defer to an agency's reasonable interpretation ... even if the court might have preferred another." NSK Ltd. v. United States, 115 F.3d 965, 973 (Fed. Cir.1997) (citations omitted).

U.S. Steel Group v. United States, 225 F.3d 1284, 1285-86 (Fed.Cir.2000). Compare United States v. Mead Corp., 533 U.S. ____, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001).

(1)

The statute underlying this action is the Uruguay Round Agreements Act ("URAA"), Pub.L. No. 103-465, 108 Stat. 4809 (Dec. 8, 1994), section 220 of which established five-year or "sunset" reviews of outstanding antidumping- and countervailing-duty orders to be conducted pursuant to:

Special rules for section 1675(b) and 1675(c) reviews

(a) Determination of likelihood of continuation or recurrence of material injury

(1) In general

In a review conducted under section 1675(b) or (c) of this title, the Commission shall determine whether revocation of an order ... would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time. The Commission shall consider the likely volume, price effect, and impact of imports of the subject merchandise on the industry if the order is revoked or the suspended investigation is terminated....

19 U.S.C. § 1675a(a). In addition to explaining in further detail the factors the ITC is to consider in evaluating the likely volume of imports and their price effect and impact on a domestic industry, the statute provides for cumulation in sunset reviews as follows:

For purposes of this subsection, the Commission may cumulatively assess the volume and effect of imports of the subject merchandise from all countries with respect to which reviews under section 1675(b) or (c) of this title were initiated on the same day, if such imports would be likely to compete with each other and with domestic like products in the United States market. The Commission shall not cumulatively assess the volume and effects of imports of the subject merchandise in a case in which it determines that such imports are likely to have no discernible adverse impact on the domestic industry.

19 U.S.C. § 1675a(a)(7).

B

In this matter, the ITC found that the prerequisites of initiation of reviews on the same day and competition in the U.S. market were met, and those findings are not at issue before the court. As for the other express limitation on Commission discretion to cumulate, namely, whenever subject "imports are likely to have no discernible adverse impact on the domestic industry", Commissioner Koplan was of the view that

current volumes of subject imports from India, even with the countervailing duty order in place, exceed levels that would satisfy the "no discernible adverse impact" provision. There is no evidence in the record indicating that subject imports from India are likely to decline significantly upon revocation .... [W]ith at least a 17 percent share of the market, I cannot conclude that the subject imports from India are likely to have ... no discernible adverse impact on the domestic industry if the ... duty order is revoked.

USITC Pub. 3247, p. 28. Nonetheless, the commissioner declined to comulate, explaining that

the conditions of competition would be significantly different for subject imports from India as opposed to those for subject imports from China, Brazil and Canada if the respective orders were revoked. Consequently, I find that it is not appropriate to assess cumulatively the likely volume and price effects of subject imports from India with those ... from China, Brazil, and Canada.

Id. at 31. His discussion of such conditions of competition includes a comparative analysis of current and likely margins, volume, and price effects:

... [T]he magnitude of the antidumping duty margins, and likely margins of dumping, for imports from China, Brazil, and, to a lesser extent Canada, are all significantly higher than the current and likely countervailing duty rate on subject...