Siemens Energy, Inc. v. United States

• Decision Date: 25 November 2015
• Docket Number: No. 2014–1725.,2014–1725.
• Citation: 806 F.3d 1367
• Parties: SIEMENS ENERGY, INC., Plaintiff–Appellant Titan Wind Energy (Suzhou) Co., Ltd., CS Wind Tech Co., Ltd., CS Wind Vietnam Co., Ltd., Chengxi Shipyard Co., Ltd., Plaintiffs v. UNITED STATES, Wind Tower Trade Coalition, Defendants–Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

806 F.3d 1367

SIEMENS ENERGY, INC., Plaintiff–AppellantTitan Wind Energy (Suzhou) Co., Ltd., CS Wind Tech Co., Ltd., CS Wind Vietnam Co., Ltd., Chengxi Shipyard Co., Ltd., Plaintiffs

v.UNITED STATES, Wind Tower Trade Coalition, Defendants–Appellees.

No. 2014–1725.

United States Court of Appeals, Federal Circuit.

Nov. 25, 2015.

Michael S. Snarr, Baker & Hostetler LLP, Washington, DC argued for plaintiff-appellant. Also represented by Elliot Jay Feldman, Shawnna Yashar.

Michael Haldenstein, Office of the General Counsel, International Trade Commission, Washington, DC argued for defendant-appellee United States. Also represented by Rhonda Hughes, Dominic L. Bianchi.

Daniel B. Pickard, Wiley Rein, LLP, Washington, DC argued for defendant-appellee Wind Tower Trade Coalition. Also represented by Derick Holt, Maureen E. Thorson, Usha Neelakantan.

Opinion

Opinion for the court filed by Circuit Judge NEWMAN.

Concurring in part opinion filed by Circuit Judge WALLACH.

NEWMAN, Circuit Judge.

Siemens Energy, Inc., an importer of utility scale wind towers, appeals the decision of the Court of International Trade, which upheld the International Trade Commission's (ITC or Commission) final affirmative injury determination in the antidumping and countervailing duty investigations of utility scale wind towers from the People's Republic of China and in the antidumping duty investigation of utility scale wind towers from the Socialist Republic of Vietnam (together, the subject merchandise).¹The judgment is affirmed.

Discussion

The Department of Commerce determined that the subject merchandise was sold in the United States at less than fair value and that it received countervailable subsidies, and the ITC made an affirmative determination of material injury to the domestic industry. The determination was by divided vote of the six-member Commission; the issues on appeal concern the interpretation and effect of the divided vote.

19 U.S.C. § 1677(11) (2012)provides that an evenly divided vote is deemed an affirmative determination:

Affirmative determinations by divided Commission.... If the Commissioners voting on a determination by the Commission ... are evenly divided as to whether the determination should be affirmative or negative, the Commission shall be deemed to have made an affirmative determination.

§ 1677(11). The issue arises because the divided vote was not a simple three-to-three split on the question of material injury to the domestic industry; instead, two Commissioners found present material injury and one Commissioner found threat of material injury, while three Commissioners found that there was neither material injury nor threat of material injury. Siemens challenges the protocol of including threat of injury with actual injury, and argues that since four Commissioners found no present material injury, the ITC and the Court of International Trade erred in deeming the vote a tie. Siemens also argues that the findings of present material injury and threat of injury are incorrect.

I

On appeal from the Court of International Trade's review of Title 19 determinations by the ITC, this court applies the same standard of review as did the Court of International Trade. Fedmet Res. Corp. v. United States,755 F.3d 912, 918 (Fed.Cir.2014). Thus we determine whether the Commission's determination is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B)(i). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Universal Camera Corp. v. NLRB,340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951). It need not be a preponderance, but must be “more than a scintilla.” Id.(quoting Consol. Edison Co. v. NLRB,305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)).

Support by substantial evidence is determined on the entirety of the record, taking into account the evidence that supports and the evidence that detracts from the agency's conclusion. Id.at 488, 71 S.Ct. 456. In turn, when reviewing a divided vote of the Commission, each category of inquiry that contributes to the tie is separately determined, in implementation of the statute:

19 U.S.C. § 1677(11). For the purpose of applying this paragraph when the issue before the Commission is to determine whether there is—

(A) material injury to an industry in the United States,

(B) threat of material injury to such an industry, or

(C) material retardation of the establishment of an industry in the United States,

by reason of imports of the merchandise, an affirmative vote on any of the issues shall be treated as a vote that the determination should be affirmative.

The ITC statute thus foresaw possible factual variations, and Congress established that a tie vote produces an affirmative determination of injury.

A. Finding of Material Injury

The criteria for determination of material injury are set by statute:

19 U.S.C. § 1677(7)(B). When considering whether a domestic industry is materially injured by imports of like products, the Commission:

(i)shall consider—

(I)the volume of imports of the subject merchandise,

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

(III)the impact of imports of such merchandise on domestic producers of domestic like products, but only in the context of production operations within the United States; and

(ii)may consider such other economic factors as are relevant to the determination regarding whether there is material injury by reason of imports.

The period of investigation for this petition covered 2009 through the first six months of 2012.

Two Commissioners, Chairman Williamson and Commissioner Aranoff, found material injury to the domestic industry. As to the volume of imports of subject merchandise, these Commissioners found “the volume of subject imports and the increase in volume to be significant, both in absolute terms and relative to consumption and production in the United States.” ITC Views at *15. These Commissioners found that the imports' continuing growth in market share, accompanied by price suppression, “played a role in precluding the domestic industry from increasing production to take advantage of the increase in apparent consumption.” Id.at *16.

Turning to the price effects of the subject imports, these Commissioners found that although both import and domestic prices were rising and the imported wind towers had a higher total delivered cost than comparable domestic wind towers, the price gap was shrinking and potential customers were using the imports to put pressure on domestic prices. They stated:

We find that although [original equipment manufacturers] ultimately are concerned with total delivered cost, they do not agree to purchase wind towers from the closest available source without regard to f.o.b. pricing. Rather, they negotiate with the domestic producers regarding f.o.b. prices, the largest component of delivered cost.

Id.at *18.

With respect to the impact of subject imports, these Commissioners found that the growing volume of the imports suppressed domestic prices, and that the domestic industry experienced “steep declines in operating income” between 2009 and 2012. Id.at *21. Taken together, Commissioners Williamson and Aranoff determined that there was material injury to the domestic industry.

On appeal to the Court of International Trade, and now to this court, Siemens argued that these findings are not supported by substantial evidence. Siemens states that these two Commissioners incorrectly compared the f.o.b. prices of the imports, instead of delivered costs, and that they accepted the false information that domestic producers had the capacity to supply the domestic market, at least at certain locations in the United States. Siemens also states that the domestic industry was subject to operational inefficiencies, and that production during the period of investigation was slowed by the expected non-renewal of the Production Tax Credit and other tax incentives, whereby domestic producers chose not to expand capacity, in view of potential reduced demand.

The Court of International Trade considered the arguments, and concluded that the two Commissioners' findings of material injury are supported by substantial evidence on the record as a whole. The evidence of increasing import volume, price pressure and price suppression, unused domestic capacity, reduced income, and enlarging operating losses, supports these Commissioners' finding of material injury to the domestic industry. See Consol. Edison Co.,305 U.S. at 229, 59 S.Ct. 206.

B. Finding of Threat of Material Injury

Commissioner Pinkert found that the domestic industry was threatened with material injury, applying the statutory factors for determining threat of injury:

19 U.S.C. § 1677(7)(F)(i). In determining whether an industry in the United States is threatened with material injury by reason of imports (or sales for importation) of the subject merchandise, the Commission shall consider, among other relevant economic factors:

(I)if a countervailable subsidy is involved, such information as may be presented to it by the administering authority as to the nature of the subsidy (particularly as to whether the countervailable subsidy is a subsidy described in Article 3 or 6.1 of the Subsidies Agreement), and whether imports of the subject merchandise are likely to increase,

(II)any existing unused production capacity or imminent, substantial increase in production capacity in the exporting country indicating the likelihood of substantially increased imports of the subject merchandise into the United States, taking into account the availability of other export markets to absorb any additional exports,

(III)a significant rate of increase of the volume or market penetration of imports of the subject merchandise indicating the likelihood of substantially increased imports,

(IV)whether imports of the subject merchandise are

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