Sony Corp. of America v. US

• Decision Date: 26 April 1989
• Docket Number: Court No. 88-02-00120.
• Citation: 712 F. Supp. 978
• Parties: SONY CORPORATION OF AMERICA, Plaintiff, v. The UNITED STATES, Defendant, and International Association of Machinists, and Aerospace Workers et al., Defendants-Intervenors.
• Court: U.S. Court of International Trade

712 F. Supp. 978

SONY CORPORATION OF AMERICA, Plaintiff, v. The UNITED STATES, Defendant, and International Association of Machinists, and Aerospace Workers et al., Defendants-Intervenors.

Court No. 88-02-00120.

United States Court of International Trade.

April 26, 1989.

O'Melveny & Myers, Kermit Almstedt, Gary Horlick, and Jerome Lehrman, Washington, D.C., for plaintiff.

Lyn Schlitt, General Counsel, James Toupin, Asst. General Counsel, Washington, D.C., George Thompson, for the U.S. International Trade Commission, defendant.

Collier, Shannon, Rill & Scott, Paul Cullen, Laurence Lasoff, Washington, D.C., for defendants-intervenors.

OPINION

MUSGRAVE, Judge.

Plaintiff Sony Corporation of America ("Sony") moves pursuant to Rule 56.1 of the Rules of this Court for judgment on the agency record of the final determination by the United States International Trade Commission ("the Commission") in Color Picture Tubes from Canada, Japan, the Republic of Korea, and Singapore, Inv. Nos. 731-TA-367 through 370 (Final), USITC Pub. 2046 (1987), 52 Fed.Reg. 49, 209 (1987). The Court has jurisdiction under 28 U.S.C. § 1581(c) (1982).

BACKGROUND

On November 26, 1986 an antidumping petition was filed against imports of color picture tubes (CPTs) from Canada, Japan, the Republic of Korea, and Singapore. The Commission published notice on December 8, 1986 that it was instituting a preliminary investigation, 51 Fed.Reg. 44,130 (1986), and determined on January 22, 1987 that there was a reasonable indication that an industry in the U.S. was materially injured, or threatened with material injury, by reason of imports of CPTs from the subject countries that were allegedly being sold at less than fair value (LTFV). 52 Fed.Reg. 2459 (1987). Following an affirmative preliminary determination by the Department of Commerce ("Commerce") of sales of imports of CPTs at LTFV, 52 Fed.Reg. 24,320 (1987), the Commission instituted a final injury investigation, 52 Fed.Reg. 28,353 (1987), while Commerce conducted a final investigation of whether LTFV sales were occurring. On November 18, 1988 Commerce issued its final determination that imports of CPTs from the subject countries were being sold in the U.S. at less than fair value.

After Commerce's final determination the Commission considered whether the imports subject to the Commerce determination were a cause of material injury or threat thereof to an industry in the United States. The Commission held a public hearing on November 19, 1987 at which interested parties could provide their views, and provided an opportunity for such parties to submit pre-hearing and post-hearing briefs.

Plaintiff Sony, which is a domestic producer of CPTs and an importer of CPTs from Japan that were subject to the final affirmative LTFV determination, entered an appearance as a party to the Commission's investigation, but did not submit a pre-hearing brief or appear at the hearing. Sony did, however, subsequently submit a post-hearing brief in which it raised the arguments that: (a) its picture tubes constitute a separate like product or, alternatively, (b) its imported CPTs should be excluded from any affirmative injury determination because they occupy a "discrete and insular" market segment.

The Commission issued a final affirmative injury determination on December 22, 1987. 52 Fed.Reg. 49,209 (1987). The findings of the Commission were published in Color Picture Tubes from Canada, Japan, the Republic of Korea, and Singapore, Inv. Nos. 731-TA-367-370 (Final), USITC Pub. 2046 (December 1987). With regard to the like product issue the Commission concluded "that there is one domestic product—all color picture tubes." Id. at 6. Accordingly, the Commission determined that there is one domestic industry, consisting of the six U.S. producers of CPTs. Id. Through its investigation the Commission concluded that the domestic industry had been materially injured and that the imported CPTs in question were the cause of this injury. Consequently, the Commission made a final affirmative injury determination. 52 Fed.Reg. 49, 209 (1987).

After the Commission issued its final determination Commerce issued an antidumping duty order on CPTs imported from Japan. 53 Fed.Reg. 430 (1988). The final antidumping duty margin applicable to plaintiff was the "all others" weighted average rate of 27.93 percent. 53 Fed.Reg. 430, 431 (1988).

Questions Presented

Plaintiff presents two questions for review. First, whether there is substantial evidence on the record to support the Commission's determination to include Sony's Trinitron color picture tube (Trinitron tube) in the like product finding with "all color picture tubes", instead of as a separate like product. Second, whether the Trinitron tube should have been excluded from the Commission's final affirmative injury determination on the grounds that it occupies a "discrete and insular segment of the market" not in competition with other CPTs.

Standard of Review

In reviewing challenges to administrative reviews this Court must sustain the agency's determination unless it is 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) (1982). See Seattle Marine Fishing Supply Co. v. U.S., 12 CIT ___, 679 F.Supp. 1119, 1125 (1988). Substantial evidence has been held to be more than a "mere scintilla", but sufficient to reasonably support a conclusion. Ceramica Regiomontana, S.A. v. U.S., 10 CIT 399, 405, 636 F.Supp. 961, 966 (1986), aff'd, 810 F.2d 1137 (Fed. Cir.1987).

Because a reviewing court must accord due weight to an agency's interpretation of a statute it administers, this Court will defer to the agency's interpretation, provided it is "sufficiently reasonable". See American Lamb Co. v. U.S., 785 F.2d 994, 1001 (Fed.Cir.1986). As stated in Matsushita Electric Industrial Co., Ltd. v. U.S., 750 F.2d 927, 933 (Fed.Cir.1984), "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence."

DISCUSSION

1. Whether there is substantial evidence on the record to support ITC's determination to include Sony's Trinitron color picture tube in the like product finding with all color picture tubes, instead of as a separate like product.

Under the antidumping statute the Commission is charged with determining the presence of a reasonable indication that

(1) An industry in the United States—

(A) is materially injured, or

(B) is threatened with material injury, or

(2) the establishment of an industry in the United States is materially retarded, by reason of imports of the merchandise which is the subject of the investigation by the administering authority ... 19 U.S.C. § 1673b(a)(1) and (2) (1982).

"Industry" is defined in 19 U.S.C. § 1677(4)(A) (1982 and Supp. V 1987) as "the domestic producers as a whole of a like product, or those producers whose collective output of the like product constitutes a major proportion of the total domestic production of that product." "Like product" is defined in turn as "a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation...." 19 U.S.C. § 1677(10) (1982). As indicated in the legislative history of the Trade Act Agreements of 1979, the like product standard should not be interpreted in "such a narrow fashion as to permit minor differences in physical characteristics or uses to lead to the conclusion that the product and article are not `like' each other." S.Rep. No. 96-249, 96th Cong., 1st Sess. 90-91 (1979), U.S.Code Cong. & Admin.News 1979, pp. 381, 476, 477.

In sum, the Commission "determines what domestic industry produces products like the one in the class defined by ITA and whether that industry is injured by the relevant imports." Algoma Steel Corp., Ltd. v. U.S., 12 CIT ____, 688 F.Supp. 639, 644 (1988), aff'd, 865 F.2d 240 (Fed.Cir. 1989).

In the instant case the imported good with respect to which Commerce had made an affirmative determination was color picture tubes. Thus, in determining whether or not an industry in the U.S. was materially injured, or threatened thereby, the Commission had to consider what product in the U.S. is "like" the imported color picture tubes. In its determination the Commission concluded that there was only one like product; namely, all color picture tubes. Plaintiff argues that this determination is not supported by substantial evidence on the record, as Sony's Trinitron CPT is not "like" any other CPT.

Implicit in plaintiff's argument is that there are two CPT industries in the U.S., one consisting of Sony's Trinitron, the other consisting of all other domestic manufacturers of CPTs. Plaintiff argues that because the Trinitron tube utilizes a unique color picture tube technology and because the Trinitron tube is not interchangeable with other color picture tubes, the Trinitron does not perform the same function as other CPTs and is therefore not "like" other CPTs.

Defendant, and defendant-intervenor, on the other hand, argue that there is substantial evidence on the record to support the Commission's finding that all CPTs "have the same general appearance and the same end uses" and that all CPTs "generally share the same distribution process", and further, that "all picture tubes, regardless of size, are made of the same essential materials and perform the same function." (Defendant's Brief at 12; List 1, Doc. No. 201 at 5.) Defendant further argues that the similarities between all CPTs, including Sony's, "vastly outweigh" the differences asserted by plaintiff and that the Commission's conclusion was reasonable and is supported by substantial evidence on the record.

a.) CPT TECHNOLOGY

The record reflects that all CPTs subject to the investigation are cathode ray tubes that convert a video signal into a visual color display. (List...