Nippon Steel Corp. v. U.S.

• Decision Date: 17 December 2003
• Docket Number: SLIP OP. 03-168.,No. 01-00103.,01-00103.
• Citation: 301 F.Supp.2d 1355
• Parties: NIPPON STEEL CORP., Kawasaki Steel Corp., ThyssenKrupp Acciai Speciali Terni S.p.A. and Acciai Speciali Terni (USA), Inc., Plaintiffs, v. UNITED STATES, Defendant, and Allegheny Ludlum Corp., AK Steel Corp., Butler Armco Independent Union, Zanesville Armco Independent Union, and United Steelworkers of America, AFL-CIO/CLC, Defendant-Intervenors.
• Court: U.S. Court of International Trade

301 F.Supp.2d 1355

NIPPON STEEL CORP., Kawasaki Steel Corp., ThyssenKrupp Acciai Speciali Terni S.p.A. and Acciai Speciali Terni (USA), Inc., Plaintiffs, v. UNITED STATES, Defendant, and Allegheny Ludlum Corp., AK Steel Corp., Butler Armco Independent Union, Zanesville Armco Independent Union, and United Steelworkers of America, AFL-CIO/CLC, Defendant-Intervenors.

SLIP OP. 03-168.

No. 01-00103.

United States Court of International Trade.

December 17, 2003.

COPYRIGHT MATERIAL OMITTED

Gibson, Dunn & Crutcher, LLP, Washington, DC (Joseph H. Price, Douglas R. Cox, Gracia M. Berg, Gregory C. Gerdes), for plaintiff Nippon Steel Corporation.

Arent Fox Kintner Plotkin & Kahn, PLLC, Washington, DC (Robert H. Huey, Matthew J. Clark, Nancy A. Noonan, Steven F. Hill, Timothy D. Osterhaus), for plaintiff Kawaski Steel Corporation.

Hogan & Hartson, LLP, Washington, DC (Lewis E. Leibowitz, Steven J. Routh, David G. Leitch, T. Clark Weymouth, David P. Kassebaum), for plaintiffs ThyssenKrupp Acciai Speciali Terni S.p.A. and Acciai Speciali Terni (USA), Inc.

Lyn M. Schlitt, General Counsel, United States International Trade Commission; James M. Lyons, Deputy General Counsel, United States International Trade Commission (Gracemary Rizzo Roth-Roffy, Mark B. Rees), for defendant United States International Trade Commission.

Collier Shannon Scott, PLLC, Washington, DC (Kathleen W. Cannon, Michael J. Coursey, Eric R. McClafferty, John M. Herrmann, Grace W. Kim, David A. Hartquist), for defendant-intervenors Allegheny Ludlum Corporation, AK Steel Corporation, Butler Armco Independent Union, Zanesville Armco Independent Union, and the United Steelworkers of America, AFL-CIO/CLC.

OPINION AND ORDER

EATON, Judge.

This case is before the court following remand to the United States International Trade Commission ("ITC"). In Nippon Steel Corp. v. United States, 26 CIT ___, 2002 WL 31873457 (Dec. 24, 2002) ("Nippon III" ),¹ this court remanded the ITC's sunset review determination in Grain-Oriented Silicon Electrical Steel From Italy and Japan, USITC Pub. 3396, Invs. Nos. 701-TA-355 and 731-TA-659-660 (Feb.2001), List 1, Doc. 75 ("Final Determination"),² made pursuant to 19 U.S.C. §§ 1675(c), 1675a(a) (2000).³ The court instructed the ITC to:

(1) determine, in accordance with the court's finding as to the meaning of "likely" within the context of ... [19 U.S.C. §§] 1675(c) and 1675a(a) [i.e., that likely means probable], whether revocation of the Subject Orders would be likely to lead to continuation or recurrence of material injury, upon consideration of the likely volume, price effect, and impact of imports of the subject merchandise on the industry; and (2) demonstrate, in conformity with this opinion, (a) that it performed the requisite analysis by considering each of the four factors outlined in 19 U.S.C. § 1675a(a)(2)(A)-(D); and (b) that it considered whether, were the Subject Orders revoked, the likely volume of imports of the subject merchandise would be significant either in absolute terms or relative to production or consumption in the United States, pursuant to 19 U.S.C. § 1675a(a)(2).

Nippon III, 26 CIT at ___, 2002 WL 31873457, *7. In light of its findings with respect to the ITC's application of the likely standard and the legal sufficiency of the ITC's analysis of likely volume, pursuant to 19 U.S.C. § 1675a(a)(2), the court did not address the parties' substantial evidence arguments, finding that to do so at that time would have been premature. Id. at *7.

In its remand determination, the ITC stated that it applied "likely" to mean "probable." See Grain-Oriented Silicon Electrical Steel From Italy and Japan, USITC Pub. 3585, Invs. Nos. 701-TA-355 and 731-TA-659-660 (Mar.2003), List 1, Doc. 79R ("Remand Determination")⁴ at 2 n. 6 ("For purposes of the Commission's determinations on remand in these reviews, we apply the term `likely' consistent with the Court's instruction and with other recent decisions of the Court of International Trade which address the meaning of the term `likely' as it is to be applied in five-year reviews.") (citing Usinor Industeel, S.A. v. United States, 26 CIT ___, ___, 2002 WL 818240, *11 (2002); Usinor v. United States, 26 CIT ___, ___, 2002 WL 1998315, *22 (2002); Usinor Industeel, S.A. v. United States, 26 CIT ___, 215 F.Supp.2d 1356 (2002); Usinor Industeel, S.A. v. United States, 26 CIT ___, 2002 WL 31864771 (Dec. 20, 2002)). With respect to its likely volume analysis, the ITC stated that it considered each of the statutory factors in 19 U.S.C. § 1675a(a)(2)(A)-(D), and found that "[b]ecause of the nature of the GOES industry and market, ... all four factors were [not] dispositive in [its] analysis."⁵ Id. at 3. The ITC concluded that "the likely volume of subject imports would be significant in terms of U.S. production and U.S. apparent consumption if the countervailing and antidumping duty orders were revoked." Id. at 10-11. In addition, the ITC adopted the views expressed in the Final Determination with respect to the domestic like product, domestic industry, conditions of competition, and cumulation determinations.⁶ Id. at 2. By its Remand Determination, the ITC affirmed its original conclusion that revocation of the Subject Orders would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time. Id. at 17.

Plaintiffs Nippon Steel Corporation ("Nippon"), Kawasaki Steel Corporation ("Kawasaki")⁷ (collectively, the "Japanese producers"), and ThyssenKrupp Acciai Speciali Terni S.p.A.⁸ ("AST" or the "Italian producer") and Acciai Speciali Terni (USA), Inc.⁹ (collectively, "Plaintiffs") challenge, as unsupported by substantial evidence on the record, several of the ITC's determinations, including those relating to cumulation, likely volume, likely price effects, and likely impact on the domestic industry.¹⁰ The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(A)(i)(I). For the reasons set forth below, the court remands this matter to the ITC for further action in conformity with this opinion.

STANDARD OF REVIEW

The court will hold unlawful "any determination, finding, or conclusion found ... to be unsupported by substantial evidence on the record, or otherwise not in accordance with law...." 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) (citations omitted). In conducting its review, the court's function is not to reweigh the evidence but rather to ascertain whether the ITC's determinations are supported by substantial evidence on the record. Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 936 (Fed.Cir.1984). The possibility of drawing two inconsistent conclusions from the record evidence does not, in itself, prevent the ITC's determinations from being supported by substantial evidence. Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) (citations omitted).

DISCUSSION

I. CUMULATION

In a sunset review, before making its "likelihood of continuation or recurrence of material injury" determination, the ITC may, in its discretion, cumulatively assess the volume and effect of imports of subject merchandise from different countries¹¹ "if such imports would be likely to compete with each other and with domestic like products in the United States market." 19 U.S.C. § 1675a(a)(7);¹² see also Usinor Industeel, S.A., 26 CIT at ___, 2002 WL 31864771, *51 (quoting 19 U.S.C. § 1675a(a)(7)). Cumulation is prohibited where the ITC "determines that such imports are likely to have no discernible adverse impact on the domestic industry." 19 U.S.C. § 1675a(a)(7). That is, "[t]he Commission shall not cumulate imports from any country if those imports are likely to have no discernible adverse impact on the domestic industry." Statement of Administrative Action, accompanying H.R. REP. NO. 103-826(I), at 887, reprinted in 1994 U.S.C.C.A.N. 4040, 4212 ("SAA")¹³ (emphasis added); see also Usinor Industeel, S.A., 26 CIT at ___, 2002 WL 31864771, *5 (noting "there is no statutory provision enumerating the factors to be considered in determining whether subject imports from a particular country are likely to have no discernible impact.").

In the Final Determination,¹⁴ the ITC stated, (1) "that subject imports from each country would enter the U.S. market in sufficient quantities and at sufficiently low prices such that they would have a discernible adverse impact on the domestic industry," Final Determination at 9; (2) that "there likely would be a reasonable overlap of competition ... between the subject imports themselves, if the orders are revoked," id. at 10, and (3) that "there likely would be a reasonable overlap of competition between the subject imports [from Japan and Italy] and the domestic like product, ... if the orders are revoked," id., and therefore exercised its discretion to cumulate the subject imports. Plaintiffs dispute the first and second of these findings.

A. No Discernible Adverse Impact

In determining whether imports are likely to have no discernible adverse impact on the domestic industry, the ITC, as this Court has explained, engages in a dual inquiry:

[A]n affirmative finding of discernible impact is only part of the answer to the question of whether cumulation is precluded. In other words, the first question is whether the imports [from a particular country] are likely to have any [discernible] impact. If not, the ITC is precluded from cumulating. If yes, then the question remains whether that impact is also adverse.

Neenah Foundry Co., 25 CIT at ___, 155 F.Supp.2d at 775; Chefline Corp. v. United States, 25 CIT ___, ___, 170 F.Supp.2d 1320, 1331 (2001) (quoting Neenah Foundry, 25 CIT at ___, 155 F.Supp.2d at 775). The...