Papierfabrik August Koehler AG v. United States

• Decision Date: 10 January 2012
• Docket Number: Slip Op. 12–5.Court No. 08–00430.
• Citation: 34 ITRD 1051,808 F.Supp.2d 1350
• Parties: PAPIERFABRIK AUGUST KOEHLER AG and Koehler America, Inc., Plaintiffs,andMitsubishi Int'l Corp., Mitsubishi Hi–Tec Paper Flensburg GmbH, and Mitsubishi Hi–Tec Paper Bielefeld GmbH, Plaintiff–Intervenors, v. The UNITED STATES and the United States International Trade Commission, Defendants,andAppleton Papers Inc., Defendant–Intervenor.
• Court: U.S. Court of International Trade

34 ITRD 1051

808 F.Supp.2d 1350

PAPIERFABRIK AUGUST KOEHLER AG and Koehler America, Inc., Plaintiffs,andMitsubishi Int'l Corp., Mitsubishi Hi–Tec Paper Flensburg GmbH, and Mitsubishi Hi–Tec Paper Bielefeld GmbH, Plaintiff–Intervenors,

v.The UNITED STATES and the United States International Trade Commission, Defendants,andAppleton Papers Inc., Defendant–Intervenor.

Slip Op. 12–5.Court No. 08–00430.

United States Court of International Trade.

Jan. 10, 2012.

William Silverman and Richard P. Ferrin, Drinker Biddle & Reath LLP, of Washington, DC, for the Plaintiffs.

Eric C. Emerson and Jamie B. Beaber, Steptoe & Johnson LLP, of Washington, DC, for the Plaintiff–Intervenors.

David F. D'Alessandris, Trial Attorney, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendants. With him on the briefs were Tony West, Assistant Attorney General; Jeanne E. Davidson, Director; and Patricia M. McCarthy, Assistant Director.Marc A. Bernstein, Office of General Counsel, United States International Trade Commission, of Washington, DC, for Defendant United States International Trade Commission. With him on the briefs were James M. Lyons, General Counsel, and Neal J. Reynolds, Assistant General Counsel for Litigation.Joseph W. Dorn, Gilbert B. Kaplan, Brian E. McGill, and Daniel L. Schneiderman, King & Spalding LLP, of Washington, DC, for the Defendant–Intervenors.

OPINION

POGUE, Chief Judge:

This case returns to court following remand ordered by the Court of Appeals for the Federal Circuit in Papierfabrik August Koehler AG v. United States, 413 Fed.Appx. 227 (Fed.Cir.2011) (“ Koehler II ”). ¹ On remand, the International Trade Commission (the “ITC” or “Commission”) found—after obtaining and taking into consideration intermediate calculation worksheets from the Department of Commerce showing that a specific subset of lightweight thermal paper (“LWTP”) was not dumped on the United States market—that the domestic LWTP industry is still threatened with material injury by way of subject imports from Germany.

Plaintiffs (“Koehler”) challenge the Commission's remand determination. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c).

After a brief discussion of the background and applicable standard of review, the court will explain why it concludes that the Commission's remand determination is free of legal error and based on a reasonable reading of the record.

BACKGROUND

In October, 2008, the Department of Commerce (“the Department” or “Commerce”) issued a finding that imports of LWTP from Germany were being or were likely to be sold in the United States at less than fair value. Lightweight Thermal Paper from Germany, 73 Fed.Reg. 57,326 (Dep't Commerce Oct. 2, 2008) (notice of final determination of sales at less than fair value) (“ Commerce Final Determination ”).² Shortly thereafter, pursuant to 19 U.S.C. § 1673d(b), the Commission conducted a separate injury investigation and determined that the domestic LWTP industry was threatened with material injury by way of imports from Germany, including imports from Plaintiffs. Certain Lightweight Thermal Paper from China and Germany, 73 Fed.Reg. 70,367 (ITC Nov. 20, 2008) (final determinations).³

LWTP is sold in a variety of weights, including 48 grams per square meter (“48g LWTP”) and 55 grams per square meter (“55g LWTP”), which, together, comprise the bulk of LWTP sold in the United States. ITC Original Determination, USITC Pub. 4043 at 16. During the Commission's period of investigation, domestic production of LWTP was “overwhelmingly concentrated” in 55g LWTP. Remand Results 23, Sept. 30, 2011, ECF No. 123 (citing ITC Original Determination, USITC Pub. 4043 at 16). Similarly, the majority of imported LWTP during the same time period was 55g.⁴ ITC Original Determination, USITC Pub. 4043 at 16. However, the Commission also found that domestic production of 48g LWTP was highly likely to increase in the future. Id. at 38, 42. Likewise, German producers, including Plaintiffs, reported increased imports of 48g LWTP as a “significant change in product range” during the pertinent time period. Id. at 17.

During the original ITC proceedings, Plaintiffs argued that a series of worksheets from Commerce's investigation showed that 48g LWTP was not dumped in the United States market during Commerce's period of investigation and therefore the Commission should completely disregard the increase in imports of 48g LWTP in its separate injury investigation and final determination. The Commission declined to do so based in part on the Federal Circuit's decision in Algoma Steel Corp. v. United States, 865 F.2d 240 (Fed.Cir.1989), which, under the Commission's interpretation, did not “compel or even authorize the Commission to examine individual sales or model transactions considered by Commerce.” ITC Original Determination, USITC Pub. 4043 at 31 n. 201. ⁵ Because Commerce also had not issued a separate dumping margin for 48g LWTP, the Commission concluded it was not permitted to consider individual sales of 48g and 55g LWTP in its injury determination.

Plaintiffs appealed to this court which affirmed the Commission's determination. Koehler I, ––– CIT at ––––, 675 F.Supp.2d at 1191–92. The Court of Appeals, however, vacated Koehler I, holding that the Commission's refusal to consider intermediate 48g dumping margins “was premised on a divergent reading of Algoma, and a misunderstanding of Koehler's request.” Koehler II, 413 Fed.Appx. at 231. The Court stated that “ Algoma specifically allows for consideration of raw data in computer print outs ‘by reasons specific to the particular case....’ ” Id. (quoting Algoma, 865 F.2d at 242). It reasoned that the statute requires that Commerce make available to the Commission all of the information upon which its determination was based, see 19 U.S.C. § 1673d(c)(1)(A), including the sales prices of a “subset of dumped goods,” here the 48g LWTP. Koehler II, 413 Fed.Appx. at 231–32. With regard to the Plaintiffs' request, the Court of Appeals interpreted it as a request for the Commission to make decisions “based on the price, measured as a dumping margin, of a subset of dumped goods” and to analyze data that is available to the Commission. Id.⁶

The Court of Appeals further held that while the ITC may not change Commerce's determination that all of Plaintiffs' products were being dumped at a rate of 6.50 percent, it was permitted to examine and consider Commerce's intermediate calculations and subsets of the subject merchandise when making an injury determination. Id. at 231 (citing Cleo Inc. v. United States, 501 F.3d 1291, 1295 (Fed.Cir.2007)).⁷

Following the Appeals Court order and mandate, this court remanded the matter to the Commission with instructions to reconsider and revise its decision in accordance with the decision of the Court of Appeals, indicating how any decision is in accordance with Algoma Steel.

Following the remand order, the Commission re-opened its record to obtain additional material from the record of Commerce's investigation. Noting that neither the Appeals Court opinion nor this court's remand order called into question the Commission's findings or conclusions regarding domestic like product, industry, or conditions of competition, the Commission focused on “whether the information from the Commerce dumping investigation warrants modification of the prior analysis that there is a threat of material injury by reason of the subject imports.” Remand Results 5.

In affirming its finding of threat of material injury, the Commission concluded that different weights of LWTP are or will be dumped on the United States market in direct response to market competition. See Id. at 23. Specifically, importers respond to increased domestic production of and/or demand for a particular weight of LWTP by dumping the same weight of LWTP on the United States market.

STANDARD OF REVIEW

The Department, in its remand redetermination, must comply with the terms of the court's remand order. Jinan Yipin Corp. v. United States, –––CIT ––––, 637 F.Supp.2d 1183, 1185 (2009). In addition, the court “shall 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); Koyo Seiko Co. v. United States, 20 F.3d 1160, 1164 (Fed.Cir.1994).

The substantial evidence standard of review “can be translated roughly to mean ‘is [the determination] unreasonable?’ ” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed.Cir.2006) (alteration in original) (quoting SSIH Equip. S.A. v. U.S. Int'l Trade Comm'n, 718 F.2d 365, 381 (Fed.Cir.1983)); Daewoo Elecs. Co. v. Int'l Union, 6 F.3d 1511, 1520 (Fed.Cir.1993) (“The specific determination we make is ‘whether the evidence and reasonable inferences from the record support’ [the agency's] findings.”). Moreover, the possibility of drawing two inconsistent conclusions from the evidence does not render the agency's determination unreasonable, Consolo v. Fed. Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966), and where “[s]ubstantial evidence exists on both sides of the issue[,] ... the statutory substantial evidence standard compels deference to the [agency].” Nippon Steel, 458 F.3d at 1354.

DISCUSSION

While Commerce is charged with investigating whether merchandise is being dumped on the domestic market and if so, determining the dumping margin for such imports, the ITC is responsible for determining whether an industry in the United States is or will be threatened with material injury by reason of these imports. See 19 U.S.C. § 1673d(b). The Commission's analysis is, by its nature, of a different character and also covers a different time period than the Commerce investigation. See 19 U.S.C. § 1677(7)(F) (charging the ITC with the forward-looking task of determining actual and potential effects of imports of...