Nitrogen Solutions Fair Trade Comm. v. U.S.

• Decision Date: 31 January 2005
• Docket Number: Court No. 03-00260.,Slip Op. 05-13.
• Citation: 358 F.Supp.2d 1314
• Parties: NITROGEN SOLUTIONS FAIR TRADE COMMITTEE, Plaintiff, v. UNITED STATES, Defendant, and JSC Nevinnomysskij Azot Inc., Transammonia, Inc. and J.R. Simplot Company, Defendant-Intervenors.
• Court: U.S. Court of International Trade

Page 1314

358 F.Supp.2d 1314

NITROGEN SOLUTIONS FAIR TRADE COMMITTEE, Plaintiff, v. UNITED STATES, Defendant, and JSC Nevinnomysskij Azot Inc., Transammonia, Inc. and J.R. Simplot Company, Defendant-Intervenors.

Slip Op. 05-13.

Court No. 03-00260.

United States Court of International Trade.

January 31, 2005.

COPYRIGHT MATERIAL OMITTED

Akin, Gump, Strauss, Hauer & Feld, LLP (Valerie A. Slater and Margaret Chisholm Marsh) for Plaintiff Nitrogen Solutions Fair Trade Committee.

James Lyons, Acting General Counsel, U.S. International Trade Commission (Michael Kenneth Haldenstein) for Defendant United States.

White & Case, LLP (Walter J. Spak, Frank H. Morgan, and Lyle B. Vander Schaaf) for Defendant-Intervenors JSC Nevinnomysskij Azot Inc. and Transammonia, Inc.

Miller & Chevalier Chartered (Peter J. Koenig) for Defendant-Intervenor J.R. Simplot Company.

OPINION

GOLDBERG, Senior District Judge.

[ITC's final negative injury and threat determination sustained.]

In this action, Plaintiff Nitrogen Solutions Fair Trade Committee challenges the final negative injury and threat determination of the United States International Trade Commission ("ITC") in the antidumping proceedings involving Urea Ammonium Nitrate Solutions from Belarus, Russia and Ukraine, 68 Fed.Reg. 18673 (Apr. 16, 2003) ("Notice of Determination") and USITC Pub. 3591, Inv. Nos. 731-TA-1006, 1008, and 1009 (Apr.2003) ("Views of the Commission") (together, the "Final Determination"). Pursuant to USCIT Rule 56.2, Plaintiff moves for judgment on the agency record.

For the reasons that follow, the Court sustains the Final Determination.

I. BACKGROUND

Plaintiff is an association of domestic producers of urea ammonium nitrate ("UAN"). Notice of Determination at 18674. UAN is a liquid nitrogen fertilizer used primarily in the United States ("U.S.") for row crops. Views of the Commission at 5. It is a commodity product; UAN from different sources (including imports) is commingled throughout the distribution system. Id. at 14. Natural gas is an important material input used to produce UAN, accounting for over half of its cost of production. Id. In late 2000 and early 2001, natural gas prices in the U.S. increased dramatically. Id. During this same period, domestic UAN prices rose, domestic UAN consumption fell and the volume of UAN imports to the U.S. increased. Id. at 13-16. In addition, the domestic UAN industry lost market share and suffered financially. Id. at 25. Natural gas prices began to normalize in mid 2001. Id. at 18. Imports also began to decline, although remained at historically high levels. Id.

On April 19, 2002, Plaintiff filed petitions with the U.S. Department of Commerce and the ITC alleging that UAN from Belarus, Lithuania, Russia and Ukraine was being sold in the U.S. at less than fair value and was causing material injury or threatening to cause material injury to the domestic UAN industry. The ITC initiated an antidumping investigation on that same day. 67 Fed.Reg. 20994 (Apr. 29, 2002). On June 4, 2002, the ITC issued a unanimous affirmative preliminary injury and threat determination as to UAN imports from Belarus, Russia and Ukraine (the "subject imports"), and determined that imports from Lithuania were negligible. Urea Ammonium Nitrate Solutions from Belaus, Russia, and Ukraine, 67 Fed.Reg. 39439 (June 7, 2002) and USITC Pub. 3517, Inv. Nos. 731-TA-1006, 1008, and 1009 (June 2002) ("Preliminary Views of the Commission") (together, the "Preliminary Determination").

The ITC then commenced its final investigation. On April 10, 2003, the ITC issued the Final Determination, unanimously concluding that the domestic UAN industry was not materially injured or threatened with material injury by reason of the subject imports. Views of the Commission at 34.

This appeal followed. The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1581(c).

II. STANDARD OF REVIEW

The Court must sustain the Final Determination 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). Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion" taking into account the record as a whole. Pierce v. Underwood, 487 U.S. 552, 565, 108 S.Ct. 2541, 101 L.Ed.2d 490 (1988) (citation omitted). It "requires more than a mere scintilla, but is satisfied by something less than the weight of the evidence." Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed.Cir.2004) (citations omitted).

In conducting its review, the Court must consider "not only the evidence on the record that justifies the ITC's findings, but also whatever in the record fairly detracts from its weight." Am. Bearing Mfrs. Ass'n v. United States, 28 CIT ___, ___, 350 F.Supp.2d 1100 (2004) (citations omitted). However, the Court "may not reweigh the evidence or substitute its judgment for that of the ITC." Dastech Int'l, Inc. v. USITC, 21 CIT 469, 470, 963 F.Supp. 1220, 1222 (1997). Instead, the Court's function is to ascertain "whether there was evidence which could reasonably lead to the [ITC]'s conclusion [.]" Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed.Cir.1984). "[T]he possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." Id. (citation omitted).

III. DISCUSSION

A. The ITC's Determination that Subject Imports Did Not Undersell Domestic UAN Is Supported by Substantial Evidence and Otherwise in Accordance with Law.

In making its final injury and threat determination, the ITC was required to consider the effect of subject imports on domestic UAN prices. 19 U.S.C. § 1677(7)(B)(i)(II). As part of this evaluation, the ITC was further required to consider whether there had been "significant price underselling" by subject imports compared with the price of domestic UAN during the period of investigation. Id. § 1677(7)(C)(ii)(I). In the Final Determination, the ITC found that prices of imported UAN were generally higher than domestic UAN from 1999 to 2001 and for the interim periods of January-September 2001 and January-September 2002 (together, the "period of investigation"). Views of the Commission at 20. Relying in part on this underselling analysis, the ITC ultimately concluded that there was no evidence of significant price effects by reason of the subject imports. Id. at 21.

Plaintiff advances four arguments for why the ITC's underselling analysis is not supported by substantial record evidence or otherwise in accordance with law. For the reasons set forth below, the Court sustains this aspect of the Final Determination.

1. The ITC Appropriately Excluded Sales Data That Did Not Involve Comparable Quantities of UAN.

Plaintiff argues that the ITC erred by excluding from consideration in its underselling analysis certain sales data from a significant importer into three of the U.S. cities under investigation ([]). See Plaintiff's Memorandum In Support of Its Rule 56.2 Motion for Judgment on the Agency Record ("Pl.'s Br.") at 17. In the Final Determination, the ITC declined to consider this importer's sales made by [ ] because sales using this form of transport "[did] not involve comparable quantities" and "were generally much larger than the sales of domestic UAN." Views of the Commission at 21 n. 101. Plaintiff contends that the ITC should not have excluded these sales because: (1) except for one significant importer, none of the sales data gathered during the investigation distinguished sales based on transportation modes or shipment quantities, rendering impossible any comparisons on these bases among non-excluded sales and (2) most producers (including the significant importer in question) did not report volume discounts, indicating that prices for large and small quantity sales were comparable.¹ Pl.'s Br. at 17-20. According to Plaintiff, this erroneous exclusion resulted in a flawed set of sales data that skewed the ITC's underselling analysis. Id. at 20.

The Court finds that the ITC appropriately excluded from its underselling analysis sales made by [ ] because they did not involve comparable quantities of UAN. First, the Court finds that the ITC had a sufficient data set from which it could reasonably make a distinction between the excluded sales and other reported sales. Using its final questionnaire, the ITC collected monthly sales data for certain U.S. cities from domestic UAN producers and UAN importers over the period of investigation. See Plaintiff's Appendix to Plaintiff's Rule 56.2 Motion for Judgment Upon the Agency Record ("Pl.'s App."), App. 12 (Form of Final Questionnaire) at 13. It was not necessary for the final questionnaire to request per-sale information on the mode of transport because, contrary to Plaintiff's contention, the ITC did not exclude sales on the basis of their mode of transport. The Final Determination clearly indicates that the sales in question were excluded solely because of their incomparable quantities. See Views of the Commission at 21 n. 101. Although these large quantities were possible only "because of the way in which the product [was] sold," this does not equate to a distinction based on mode of transport. Id. at 21. In addition, the Court finds that it was not necessary for the final questionnaire to require per-sale quantity information for all UAN producers. The per-sale quantity of the excluded sales was so large that, even if it were assumed that the monthly sales volume reported by each domestic producer represented a single sale, the sales in question nonetheless represented significantly higher quantities in nearly every month of comparison. See Defendant's Appendix to Defendant's Response in Opposition to Plaintiff's Rule 56.2 Motion for Judgment Upon the Agency Record ("Def.'s App."), List 2, Doc. 108 (ITC Staff Report for INV-AA-031 dated ...