Nippon Steel Corp. v. U.S.

• Citation: 458 F.3d 1345
• Decision Date: 10 August 2006
• Docket Number: No. 05-1417.,No. 05-1404.,05-1404.,05-1417.
• Parties: NIPPON STEEL CORPORATION, NKK Corporation, Kawasaki Steel Corporation, and Toyo Kohan Co., Ltd., Plaintiffs-Appellees, v. UNITED STATES, Defendant-Appellant, and Mittal Steel USA ISG Inc., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals for the Federal Circuit

458 F.3d 1345

NIPPON STEEL CORPORATION, NKK Corporation, Kawasaki Steel Corporation, and Toyo Kohan Co., Ltd., Plaintiffs-Appellees, v. UNITED STATES, Defendant-Appellant, and Mittal Steel USA ISG Inc., Defendant-Appellant.

No. 05-1404.

No. 05-1417.

United States Court of Appeals, Federal Circuit.

August 10, 2006.

James P. Durling, Willkie Farr & Gallagher, LLP, of Washington, DC, argued for plaintiffs-appellees. With him on the brief were Daniel L. Porter and Robert E. DeFrancesco.

Neal J. Reynolds, Assistant General Counsel for Litigation, Office of the General Counsel, United States International Trade Commission, of Washington, DC, argued for defendant-appellant United States. With him on the brief was James M. Lyons, General Counsel.

Terence P. Stewart, Stewart and Stewart, of Washington, DC, argued for defendant-appellant Mittal Steel USA ISG Inc. With him on the brief were Eric P. Salonen, Patrick J. McDonough, and Sarah V. Stewart.

John J. Mangan, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington, DC, for amicus curiae United States Steel Corporation. With him on the brief were Robert E. Lighthizer, James C. Hecht, and Stephen P. Vaughn.

Before MICHEL, Chief Judge, LINN and PROST, Circuit Judges.

MICHEL, Chief Judge.

The United States and Mittal Steel USA ISG Inc. ("Mittal") appeal the decision of the United States Court of International Trade ("trade court") instructing the United States International Trade Commission ("Commission") to issue a determination that the domestic industry was not materially injured by less-than-fair-value ("LTFV") imports of tin- and chromium-coated steel sheets ("TCCSS") from Japan. Nippon Steel Corp. v. United States, 350 F.Supp.2d 1186, 1189, 1222 (Ct. Int'l Trade 2004) ("Nippon IV"). The Commission accordingly entered determinations of no material injury and no threat of material injury. Tin- and Chromium-Coated Steel Sheet from Japan (Views on Remand), USITC Pub. 3751, Inv. No. 731-TA-860 (Final) (Dec.2004) (Third Remand Determination) ("TRD"). The Court of International Trade sustained the negative determinations. Nippon Steel Corp. v. United States, No. 00-09-00479, 2005 WL 675842 (Ct. Int'l Trade Mar. 23, 2005) ("Nippon V").

Appellants argue that the Court of International Trade erred in Nippon IV by reweighing the facts and substituting its own credibility determinations, in contravention of law and this court's remand instructions in Nippon Steel Corp. v. Int'l Trade Comm'n, 345 F.3d 1379, 1380 (Fed. Cir.2003) ("Nippon III"). Appellants further argue that the Court of International Trade erred in holding in Nippon IV that the Commission's affirmative material injury determination in its second remand determination, Tin- and Chromium-Coated Steel Sheet From Japan, Inv. No. 731-TA-860 (Feb.2004) (A.R.2-263R) (Second Remand Determination) ("SRD"), was supported by less than substantial evidence.

We agree. Accordingly, we reverse the Court of International Trade's decisions in Nippon IV and Nippon V, and instruct the trade court to vacate the Commission's negative material injury and negative threat of material injury determinations in TRD and reinstate the Commission's affirmative material injury determination in SRD.

I

This antidumping case has a procedural history spanning six years, which now includes four determinations by the Commission, four opinions from the Court of International Trade, and one prior opinion from this court. Given the voluminous record in this case, we presume familiarity with the prior proceedings, issues and factual background. Accordingly, we provide only a cursory overview of the procedural history, and discuss only those factual and evidentiary issues that remain in dispute.

In 2000, the Commission made a final determination that the domestic industry was materially injured by TCCSS dumping from Japan, which required consideration of import volume, price effects, impact on domestic producers, and causation. Tin-and Chromium-Coated Steel Sheet From Japan, 65 Fed.Reg. 50,005, USITC Pub. 3300, Inv. No. 731-TA-860 (final determ.) (Aug.2000) (A.R.2-148) ("Final Determination"). See 19 U.S.C. § 1677(7)(B)(i); Gerald Metals, Inc. v. United States, 27 F.Supp.2d 1351, 1356 & n. 8 (Ct. Int'l Trade 1998). Nippon Steel Corporation, NKK Corporation, Kawasaki Steel Corporation, and Toyo Kohan Co., Ltd. (collectively, "Nippon") sought review in the Court of International Trade, which sustained the Commission's finding of a small but significant volume, but remanded for a reevaluation of price effects and causation.¹ Nippon Steel Corp. v. United States, 182 F.Supp.2d 1330, 1340, 1356 (Ct. Int'l Trade 2001) ("Nippon I").

On remand, the Commission again made an affirmative material injury determination. Tin- and Chromium-Coated Steel Sheet From Japan, Inv. No. 731-TA-860 (final determ.) (March 2002) (A.R.2-261R) (First Remand Determination) ("FRD"). Nippon again appealed, and the Court of International Trade found lingering flaws in the Commission's analysis of price effects and causation. Nippon Steel Corp. v. United States, 223 F.Supp.2d 1349 (Ct. Int'l Trade 2002) ("Nippon II"). However, rather than remand for further proceedings, the court vacated the affirmative material injury determination and directed the Commission to enter a negative material injury determination. Id. at 1372. The court declined to remand because, it stated, the Commission had "demonstrated an unwillingness or inability to address the substantial claims made by the respondents or the concerns expressed by the court in Nippon I." Id. at 1371-72.

The Commission then appealed to this court. We vacated the decision of the Court of International Trade in Nippon II and ordered a remand to the Commission for additional data gathering and analysis. Nippon III, 345 F.3d at 1380. We explained that "to the extent the Court of International Trade engaged in refinding the facts (e.g., by determining witness credibility), or interposing its own determinations on causation and material injury . . . [it] exceeded its authority", and held that the trade court abused its discretion by declining to remand the case to the Commission. Id. at 1381.

On the second remand, the Commission yet again made an affirmative material injury determination. SRD. Nippon sought review once more, and the Court of International Trade remanded for a third time, again instructing the Commission to enter a negative material injury determination. Nippon IV, 350 F.Supp.2d. at 1189. In addition, the trade court directed the Commission to determine whether the domestic industry was threatened with material injury. Id. at 1222.

The Commission entered a negative material injury determination on the third remand, stating: "this outcome is dictated by the Court's findings in Nippon IV; it is not, however, the determination we would have made in the absence of those findings." TRD at 1. Similarly, the Commission found that certain statutory factors weighed in favor of an affirmative threat determination, but explained that the trade court's statement in Nippon IV that "the record fully supports a negative determination and will not support an affirmative one", 350 F.Supp.2d at 1222 (emphasis in original), "constrained significantly" its ability to perform a threat analysis and, in effect, required it to issue a ruling contrary to its factual findings. TRD at 5-6. As such, the Commission issued a negative threat of material injury determination. Id. The Commission expressed concern that the Court of International Trade had again exceeded the scope of its authority:

Although we comply with the Court's order, we are concerned the Court has again exceeded the scope of its review authority in this case . . . [W]e believe that the trade court has committed the same mistakes identified by the Federal Circuit in Nippon III. For example, the Court has again re-found facts by substituting its view of the record for that of the Commission on such important issues as the significance of subject underselling or the existence of correlations between underselling and increased purchases of subject imports during the [period of investigation]. The Court has also rejected the Commission's witness credibility determinations, substituting in its place the Court's own assessment of the accuracy of testimony offered by purchasers during the investigation.

Finally, by directing the Commission to issue a determination that subject imports did not cause material injury to the industry, the Court has again substituted its own findings on the ultimate issues of causation and injury for those of the Commission, even though the Federal Circuit specifically directed the Court in Nippon III not to do so.

Id. at 5.

Defendant-intervenor International Steel Group Inc. ("ISG")² sought review of the third remand determination in the Court of International Trade, arguing that the record supported an affirmative threat determination, and Nippon challenged certain subsidiary findings of the Commission's negative threat determination. Nippon V, slip op. at 3. The court sustained the negative material injury determination. Id., slip op. at 5. The court agreed with plaintiffs that two of the three appealed subsidiary rulings regarding threat of material injury—relating to production capacity, and volume and market penetration, see 19 U.S.C. § 1677(7)(F)(ii)—were flawed, but sustained as "reasonable" the Commission's ultimate negative determination of threat of material injury. Id., slip op. at 9, 14.

The United States and Mittal appeal. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(5).

II

Congress created a highly specialized system for resolving antidumping allegations, which recognizes and exploits each participant's area of expertise. An antidumping inquiry is divided into two sub-inquiries: a determination of whether the subject imports were, or were likely to be, sold at LTFV, and a material injury determination. Congre...