Roses, Inc. v. US, Court No. 84-10-01371.

• Decision Date: 18 August 1989
• Docket Number: Court No. 84-10-01371.
• Citation: 13 CIT 662,720 F. Supp. 180
• Parties: ROSES, INCORPORATED, Plaintiff, v. UNITED STATES, Defendant, and Asociacion Colombiana de Exportadores de flores et al., Intervenors-Defendants.
• Court: U.S. Court of International Trade

720 F. Supp. 180

13 CIT 662

ROSES, INCORPORATED, Plaintiff, v. UNITED STATES, Defendant and Asociacion Colombiana de Exportadores de flores et al., Intervenors-Defendants.

Court No. 84-10-01371.

United States Court of International Trade.

August 18, 1989.

Stewart and Stewart, Eugene L. Stewart and Terence P. Stewart, Washington, D.C., for the plaintiff.

Office of Gen. Counsel, U.S. Intern. Trade Com'n, Lyn M. Schlitt, James A. Toupin and Judith M. Czako, Washington, D.C., for defendant.

Arnold & Porter, Alan O. Sykes and Dan Esty, and Heron, Burchette, Ruckert & Rothwell, Thomas A. Rothwell, Jr., James M. Lyons and William E. Donnelly, Washington, D.C., on the brief, in opposition, for intervenors-defendants.

OPINION

AQUILINO, Judge:

This and two other actions between the same parties, CIT Nos. 84-08-01215 and 84-10-01447, which arise out of an antidumping investigation of fresh cut roses from Colombia, have been reassigned to me for disposition. In this action, the plaintiff has interposed a motion for judgment upon the record compiled by the U.S. International Trade Commission ("ITC") in reaching its final determination that an industry in the United States is not materially injured, or threatened with material injury, by reason of the rose imports investigated. 49 Fed.Reg. 36,712 (Sept. 19, 1984); USITC Pub. 1575 (Sept. 1984).

I

After the International Trade Administration, U.S. Department of Commerce had published Fresh Cut Roses From Colombia; Final Determination of Sales at Less Than Fair Value¹, the ITC, by a vote of three to one, reached the final negative injury determination² at issue herein. The views of the majority are summarized as follows:

Imports of fresh cut roses from Colombia have had no material impact on the domestic industry, in spite of a sharp increase in imports during January 1981-March 1984, the period under investigation. The domestic industry is in a healthy condition; domestic production, shipments, profits and productivity have all increased. Further, the increase in U.S. consumption more than accounts for the increase in imports from Colombia. Average prices for domestic roses also increased steadily. Although in some instances the imported roses from Colombia have undersold domestic roses, in a number of instances, the imported roses from Colombia oversold domestic roses on a delivered basis. Potential increases in imports from Colombia present no threat of material injury to the domestic industry because the industry has exhibited the strength to withstand import competition, and the projected increase in imports is small relative to the domestic market and past increases. Pub. 1575 at 3.

The commissioner in dissent determined a threat of material injury to the domestic industry to exist, based on the following approach:

... First, imports of roses from Colombia are increasing at an accelerating rate both in volume and in the share of the U.S. market they command. Second, recent expansion of Colombian production capacity is just beginning to affect the domestic market. Finally, because of the special nature of the product which is the subject of this investigation, the effect of mounting competition from LTFV imports from Colombia will be material injury to the domestic industry which is already showing signs of strain. Pub. 1575 at 13.

II

This action has been brought pursuant to 19 U.S.C. § 1516a(a)(2)(A)(i) and (B)(ii). Jurisdiction is based on 28 U.S.C. § 1581(c). The plaintiff has submitted a voluminous brief in support of its motion for judgment on the record which contests, for the most part, the ITC majority's views of the evidence gathered during the investigation. The plaintiff argues that the Commission "ignored pertinent facts of record"³ and

based its decision upon erroneous data contained in the ... staff report which in part were the result of mathematical and conceptual errors, and in part failed to include all of the corrected responses to the Commission's questionnaire submitted by domestic rose growers....⁴

The plaintiff has sought to buttress its viewpoint by submitting as an appendix to its brief some 228 printed sheets purporting to "correct" the data. The defendant argues that the court should disregard them as not being part of the agency record. However, after consideration of their contents and comparison with the record, the court finds the appendix to be within the realm of permissible argument in support of judicial review.

The standard prescribed by statute for such review of a final ITC determination is whether it is unsupported by substantial evidence on the record, or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B). The record is to be reviewed for "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion". Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938). And in doing so, the

views of this court may not be freely substituted for those of ITC; nor may reversal be predicated solely on an interpretation of the facts that seems more reasonable. Only if ITC's determination is not supported by substantial evidence, or if it was reached in a manner contrary to law, may it be overturned.⁵

That law, 19 U.S.C. § 1677(7)(B) (1982), required the Commission to consider, among other factors—

(i) the volume of imports of the merchandise which is the subject of the investigation,

(ii) the effect of imports of that merchandise on prices in the United States for like products, and

(iii) the impact of imports of such merchandise on domestic producers of like products.

Subsection (C) of section 1677(7) added the following:

(i) Volume.—In evaluating the volume of imports of merchandise, the Commission shall consider whether the volume of imports of the merchandise, or any increase in that volume, either in absolute terms or relative to production or consumption in the United States, is significant.

(ii) Price.—In evaluating the effect of imports of such merchandise on prices, the Commission shall consider whether—

(I) there has been significant price undercutting by the imported merchandise as compared with the price of like products of the United States, and

(II) the effect of imports of such merchandise otherwise depresses prices to a significant degree or prevents price increases, which otherwise would have occurred, to a significant degree.

(iii) Impact on affected industry.—In examining the impact on the affected industry, the Commission shall evaluate all relevant economic factors which have a bearing on the state of the industry, including, but not limited to—

(I) actual and potential decline in output, sales, market share, profits, productivity, return on investments, and utilization of capacity,

(II) factors affecting domestic prices, and

(III) actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital, and investment.

No one of the foregoing factors is necessarily dispositive of the question of material injury. The ITC is obligated to weigh all the pertinent evidence gathered in an investigation in reaching a determination. E.g., SCM Corp. v. United States, 4 CIT 7, 13, 544 F.Supp. 194, 199 (1982).

With regard to the volume of imports, the ITC majority conceded that it had "increased substantially". Pub. 1575 at 7. However, the commissioners found U.S. consumption rose during the review period at a pace twice that of import volume, and the expanding market was thus able to absorb substantially the import increase while, at the same time, spurring domestic production.

Undercutting was found in 62 of 110 delivered price comparisons, at an average of 20 percent, while 43 comparisons reflected overselling of the Colombian imports, by an average of approximately 18 percent. Many of the instances of undercutting were explained, however, by the fact that locally-grown roses carried price premiums based on freshness and an ability of growers to supply the flowers on a short-term need basis. See Pub. 1575 at 9-10. Those who reported price-comparison data generally indicated they had purchased imports as a complement to, rather than a substitute for, their domestic purchases, usually during times of shortfalls in the domestic supply. See id. at 9, n. 27, citing staff report at A-41 and A-114 to A-115.

The data submitted by the growers covered two varieties of rose, hybrid tea and sweetheart. The former variety accounted for 75 percent of the domestics' data and almost all of the imports, while the remaining domestic 25 percent was for sweetheart roses. The ITC concluded that the imports did not depress domestic prices. See id. at 7-8. The data reflected an industry where wholesalers purchased 70 percent of the domestic producers' output and almost 100 percent of the imports, and "domestic rose growers' selling prices of both hybrid tea and sweetheart roses sold to wholesale florists generally increased in the January-March periods of 1982-84 and in the full-year period of 1983...." Id. at A-34. Price comparisons at the retail level, on the other hand, were mixed. Domestic sweet-heart-rose prices increased in both annual and first-quarter comparisons⁶, while hybrid-tea-rose prices went up annually, though declining slightly in the first quarters. The Commission majority was not impressed by this fact, concluding that the lack of head-to-head competition between the domestics and the imports in the retail hybrid-tea-rose market could not directly affect domestic pricing patterns. See id. at 8.

At oral argument, the plaintiff acknowledged that "the ITC may not rely upon isolated tidbits of data which suggest a result contrary to the clear weight of the evidence." Transcript at 24, quoting USX Corp. v. United States, 11 CIT ____, ____, 655 F.Supp. 487, 489 (1987). Whatever its precise weight, there is substantial evidence on the record to support the ITC's conclusion that the domestic...