Nucor Fastener Div. v. United States
| Decision Date | 24 May 2013 |
| Docket Number | Slip Op. 13 - 65 |
| Court | U.S. Court of International Trade |
| Parties | NUCOR FASTENER DIVISION, Plaintiff, v. UNITED STATES, Defendant, and PORTEOUS FASTENER CO., HEADS & THREADS INTERNATIONAL, LLC, SOULE, BLAKE & WECHSLER, INC., INDENT METALS LLC, XL SCREW CORPORATION, BOSSARD NORTH AMERICA, HILLMAN GROUP, FASTENAL CO., FASTENERS AND AUTOMOTIVE PRODUCTS, BRIGHTON-BEST INTERNATIONAL, INC., and BRIGHTON-BEST INTERNATIONAL (TAIWAN) INC., Defendant-Intervenors. |
Before: Richard W. Goldberg,
United States Judge
PUBLIC VERSION
OPINION AND ORDER[Defendant's remand redetermination is sustained and plaintiff's request for a final investigation is denied.]
Daniel B. Pickard, Wiley Rein LLP, of Washington, DC, argued for plaintiff. With him on the brief were Alan H. Price and Maureen E. Thorston.
Mary J. Alves, United States International Trade Commission, of Washington, DC, argued for defendant. With her on the brief were James M. Lyons, General Counsel, and Neal J. Reynolds, Assistant General Counsel for Litigation.
Matthew T. McGrath, Barnes Richardson & Colburn LLP, of Washington, DC, argued for defendant-intervenor. With him on the brief was Stephen T. Brophy.
Plaintiff Nucor Fastener Division ("Nucor"), a domestic producer of nuts, bolts, and other fasteners, seeks judicial review of the International Trade Commission's ("the ITC" or "the Commission") remand redetermination from its preliminary antidumping and countervailing duties investigations into Certain Standard Steel Fasteners from China and Taiwan, USITC Pub. 4109, Inv. Nos. 701-TA-472 and 731-TA-1171-1172 (Nov. 2009) ("ITC Pub. 4109"). On remand, Nucor argues that the ITC did not properly address the concerns of the Court of International Trade when it reaffirmed its findings that the data it used to determine that Chinese and Taiwanese importers were not dumping was comprehensive and that Producer A was properly included into its analysis because it was, indeed, a domestic producer.
For the reasons discussed below, the ITC's remand redetermination is sustained and Nucor's request for a final investigation is denied.
On September 23, 2009, petitioner Nucor Fastener Division of St. Joseph, Indiana, filed a petition with the ITC alleging that U.S. producers of certain standard steel fasteners ("CSSF") were materially injured and threatened with material injury by reason of sales at less than fair value ("LTFV") and subsidized imports of CSSF from China and sales at LTFV of CSSF imported from Taiwan. The ITC initiated both a countervailing duty investigation and an antidumping duty investigation.
In preliminary antidumping and countervailing duty determinations, the ITC determines whether there is a reasonable indication that a domestic industry is materially injured or threatened with material injury, or that the establishment of an industry is materially retarded, by reason of the allegedly unfairly traded imports. 19 U.S.C. §§ 1671(b)(a), 1673b(a) (2006). Toreach that determination, the ITC weighs the evidence before it and determines whether: "(1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final investigation." Am. Lamb Co. v. United States, 785 F.2d 994, 1001 (Fed. Cir. 1986).
In determining whether the domestic industry has suffered material injury or faces the threat of such injury, the ITC considers factors such as the volume of subject imports, the subject imports' effect on prices for the domestic like product, and the subject imports' impact on domestic producers of the domestic like product in the context of U.S. operations. 19 U.S.C. § 1677(7)(B)(i). The ITC considers all relevant economic factors that impact the U.S. industry, with no single factor being dispositive. Id. § 1677(7)(C)(iii). All factors are considered within the context of the business cycle and competitiveness of the affected industry. Id.
On November 9, 2009, after conducting a preliminary investigation, the ITC found: (1) the record as a whole contained no reasonable indication of material injury by reason of cumulated subject imports from China and Taiwan; and (2) the record as a whole contained no reasonable indication of a threat of material injury by reason of cumulated subject imports. See generally ITC Pub. 4109. The ITC based its determination on the following factors: the conditions of competition and the business cycle (including demand conditions, supply conditions, raw material costs, and interchangeability), the volume of cumulated subject imports from China and Taiwan, the price effects of the cumulated subject imports, and the impact of the cumulated imports. Id. at 38-45. The ITC's determination that no threat of material injury existed was based on its consideration of likely subject import volumes, likely price effects, and likely impact. Id. at 41-50.
Although the ITC found that the cumulated volume of subject imports from China and Taiwan was significant in absolute terms and that subject imports were pervasively undersold, the ITC determined that there was no overall correlation between the large and steady volume of subject imports and the changes in the domestic industry's conditions and prices. Id. at 36-45. First, between 2006 and 2008, as demand somewhat declined, the ITC did not observe any significant changes that would indicate that subject imports were impinging upon the domestic industry's market share. Id. at 36-38. Rather, market share across the domestic industry, subject imports, and imports from countries outside of China and Taiwan remained stable. Id. Second, the ITC did not observe any negative price effects, as domestic industry prices tended to remain at or above their initial-period prices. Id. at 38-41. Moreover, the domestic industry's "cost of goods sold as a share of net sales," the ratio the ITC commonly uses to analyze price suppression, was relatively low and stable between 2006 and 2008. Id. at 40-41. Notwithstanding small declines in demand, a significant subject-import market share, and significant underselling from 2006 to 2008, the ITC found increased profitability and solid performance. Id. at 36-45.
Even during the 2009 economic downturn, which saw noticeable declines in demand by consumers of CSSF, the ITC determined that slight declines in domestic market share (24.5 percent in 2008 to 23.3 percent in 2009) were the result of an increase in market share by non-subject imports as opposed to those from China and Taiwan. Id. at 38. With respect to price effects, the cost of goods to net sales ratio was higher in 2009 as a result of price declines in response to the recession, not as a result of the volume of subject imports. Id. at 41. Underselling was not any more pervasive in 2009 than in any prior years. Id. Although lower sales and profitability ensued, as expected, from the recession, the domestic industry managed toearn $3.8 million in operating income ($11.4 million in 2008) and maintained a positive 5.8 percent operating margin (12.2 percent in 2008). Id. at 24-45. Thus, the ITC found that the record as a whole contained clear and convincing evidence of no reasonable indication of material injury by reason of cumulated subject imports of CSSF from China and Taiwan and no likelihood that contrary evidence would be discovered in any final investigation. Id. at 9, 36-45.
In considering whether there was any reasonable indication of a threat of material injury to the domestic producers, the ITC did not find a likelihood of substantially increased imports from China and Taiwan. Id. at 47. Although the Chinese and Taiwanese producers of CSSF had excess capacity, were export-oriented, and undersold CSSF in the U.S. market, the record data showed that their market share remained relatively stable. Id. at 47-48. The ITC also found that the industries in China and Taiwan were unlikely to change very much in the near future. Id. at 48-49. These factors, along with the fact that subject import pricing did not stimulate demand for significant additional subject imports during the investigation period, led the ITC to determine that subject imports were unlikely to constitute a threat of material injury to domestic producers. Id. at 49.
On May 14, 2010, Nucor moved for judgment on the agency record pursuant to USCIT Rule 56.2, challenging the ITC's preliminary determination results. Br. in Support of Nucor Fastener Division's Rule 56.2 Mot., D.E. 32, at 1 ("Pl.'s Mem."). On August 11, 2011, this court granted in part and denied in part Nucor's motion. Nucor Fastener Div. v. United States, 35 CIT _, 791 F. Supp. 2d 1269 (2011). The court reversed and remanded back to the ITC the following two issues: (1) the ITC's treatment of its import data as comprehensive; and (2) the ITC's unqualified reliance on Producer A's (which identified itself as a U.S. producer of domestic like product) questionnaire response. Id. at _, 791 F. Supp. 2d at 1292.
The court agreed with Nucor's challenge of the ITC's description of the importer questionnaire data as comprehensive. It identified "three potential explanations" for the ITC's conclusion and argued that each was illogical. Pl.'s Mem. at 26. First, Nucor questioned the ITC's assertion that the "responses ultimately received from [the thirty importers] represented the large majority of known CSSF imports from January 2006 and June 2009." Id. The ITC explained that it compared the importers responsible for the thirty responses "to its initial list of 78 firms that appeared to be the major importers of all types of steel fasteners covered by these [Customs] subheadings." Mem. of Def. U.S. ITC in Opp'n to Pl.'s Mot. for J. on the Agency R., D.E. 45, at 30-31 ("Def.'s Mem."). The ITC was thus able to "determine that they had received data from the large majority of significant known imports of fasteners from...
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