Timken Co. v. US

• Decision Date: 03 January 1996
• Docket Number: Slip Op. 96-8. Court No. 93-08-00475.
• Citation: 913 F. Supp. 580
• Parties: The TIMKEN COMPANY and Republic Engineered Steels, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Aços Villares, S.A.; Aço Minas Gerais, S.A.; Co-Steel Raritan, Defendant-Intervenors.
• Court: U.S. Court of International Trade

913 F. Supp. 580

The TIMKEN COMPANY and Republic Engineered Steels, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Aços Villares, S.A.; Aço Minas Gerais, S.A.; Co-Steel Raritan, Defendant-Intervenors.

Slip Op. 96-8. Court No. 93-08-00475.

United States Court of International Trade.

January 3, 1996.

Stewart and Stewart (Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., Geert De Prest and Myron A. Brilliant), Washington, DC, for plaintiffs.

Lyn M. Schlitt, General Counsel, James A. Toupin, Deputy General Counsel, United States International Trade Commission, (Scott D. Andersen), Washington, DC, for defendant.

Willkie Farr & Gallagher (William H. Barringer, Daniel L. Porter and Nancy A. Fischer) Washington, DC, for Aço Villares, S.A., defendant-intervenor.

Baker & McKenzie (Thomas Peele), Washington, DC, for Aço Minas Gerais, S.A., defendant-intervenor.

Jeffrey W. Carr, Philadelphia, PA, for Co-Steel Raritan, defendant-intervenor.

OPINION

TSOUCALAS, Judge:

This action is before the Court on a motion for judgment upon the administrative record pursuant to Rule 56.2 of this Court. The Timken Company and Republic Engineered Steels Inc. (collectively "plaintiffs") were the petitioners in the underlying investigation and are United States producers of the like product at issue. Plaintiffs challenge the unanimous negative final determination of the United States International Trade Commission ("Commission" or "ITC"), that the United States industry producing other special quality carbon and alloy hot-rolled bars and cut-length rods is neither materially injured nor threatened with material injury by reason of imports of these products from Brazil that have been found by the U.S. Department of Commerce, International Trade Administration ("Commerce"), to be sold in the United States at less than fair value ("LTFV"). The views of the Commission are published in Certain Special Quality Carbon and Alloy Hot-Rolled Steel Bars and Rods and Semifinished Products From Brazil ("Final Determination"), USITC Pub. 2662, Inv. No. 731-TA-572 (July 1993), 58 Fed.Reg. 38,138 (USITC 1993).¹

Background

On June 9, 1992, plaintiffs filed petitions with the Commission and Commerce alleging that an industry in the United States was materially injured and threatened with material injury, by reason of LTFV imports of certain special quality carbon and alloy hot rolled products from Brazil.² Final Determination at I-3-4.

Effective June 9, 1992, the Commission commenced a preliminary investigation to determine whether there is a reasonable indication that an industry in the United States is materially injured, or is threatened with material injury, or the establishment of an industry in the United States is materially retarded by reason of imports of such merchandise into the United States. Certain Special Quality Carbon and Alloy Hot-Rolled Steel Bars and Rods and Semifinished Products Thereof From Brazil, 57 Fed. Reg. 27,064 (USITC 1992). On July 21, 1992, the Commission made an affirmative preliminary injury determination. Certain Special Quality Hot-Rolled and Semifinished Carbon and Alloy Steel Products From Brazil (ITC Preliminary Determination"), USITC Pub. 2537 at 2, Inv. No. 731-TA-572 (July 1992), 57 Fed.Reg. 33,735 (USITC 1992) (prelim.).

Effective January 11, 1993, the Commission instituted a final investigation to determine whether an industry in the United States is materially injured, or is threatened with material injury, or the establishment of an industry in the United States is materially retarded, by reason of the subject Brazilian imports. Certain Special Quality Carbon and Alloy Hot-Rolled Steel Bars and Semifinished Products From Brazil, 58 Fed.Reg. 6,976 (USITC 1993).

The Commission made a final determination as to injury on July 2, 1993. Final Determination at 3, I-3. Significantly, the Commission concluded that the four industries in the United States consisting of the domestic producers of the like products: (1) free-machining semifinished steel; (2) other special quality carbon and alloy semifinished steels; (3) free-machining hot-rolled bars and cut-length rods; and (4) other special quality carbon and alloy hot-rolled bars and cut-length rods³ ("OSBQ bars") were neither materially injured nor threatened with material injury by reason of LTFV imports from Brazil of special quality carbon and alloy semi-finished steel and hot-rolled carbon and alloy bars and cut-length rods.⁴ Final Determination at 5, 10, 32-58.

It is the Commission's determination pertaining to the fourth industry, i.e., the "other special quality bar" industry, that is the subject of this action. Memorandum of Plaintiffs Republic Engineered Steels Inc. and The Timken Company in Support of Their Motion for Judgment Upon the Agency Record ("Plaintiffs' Brief") at 6. Plaintiffs advance several challenges to the Commission's negative injury and threat determination. The ITC and defendant-intervenors, Aços Villares, S.A., Aço Minas Gerais, S.A.⁵ and Co-Steel Raritan, oppose plaintiffs' motion.

Standard of Review

The Court must uphold the Commission's determination unless it finds that the determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1988). Substantial evidence is "more than a mere scintilla. It means 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, 459, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 217, 83 L.Ed. 126 (1938)). "It is not within the Court's domain either to weigh the adequate quality or quantity of the evidence for sufficiency or to reject a finding on grounds of a differing interpretation of the record." Timken Co. v. United States, 12 CIT 955, 962, 699 F.Supp. 300, 306 (1988), aff'd, 894 F.2d 385 (Fed.Cir.1990).

Discussion

1. Like Product⁶

In the case at bar, five out of six Commissioners initially found two "like" products consisting of (1) semifinished special quality carbon and alloy steels and (2) hot-rolled special quality carbon and alloy bar (including cut-length and coiled bar) and cut-length rod.⁷ ITC Preliminary Determination at 9. In the final determination, the Commissioners affirmed their preliminary finding that there are separate like products of semifinished steels and hot-rolled bars and cut-length rods. Final Determination at 12. Thus, the Commission determined that there are four "like" products. Id. at 17.

Avoiding a frontal attack, plaintiffs dispute the ITC's "like product" finding on the ground that the Commission impermissibly treated hot-rolled finished bar and cut-length rod and semifinished special quality steel as separate like products. Plaintiffs' Brief at 51-55. Plaintiffs claim that the "Commission's sole task ... is to determine whether there exist separate industries." Id. at 54 (citing Algoma Steel Corp. v. United States, 12 CIT 518, 522-23, 688 F.Supp. 639, 644 (1988), aff'd, 865 F.2d 240, cert. denied, 492 U.S. 919, 109 S.Ct. 3244, 106 L.Ed.2d 590 (1989)). According to plaintiffs, "any differences between the potential `like products' are instructive only if and when there arise difficulties addressing the fundamental question: whether separate industries existed." Plaintiffs' Brief at 54. Plaintiffs' support is the claim that the continuous process of production by which semi-finished steel is made into bar products contradicts the Commission's finding that semifinished and hot-rolled products are separate products. Tr. of Oral Argument at 20. Plaintiffs also charge that the Commission distorted its causation analysis by double-counting certain in-process semifinished special quality products as finished products, i.e., counting them as both semifinished and finished. Plaintiffs' Brief at 2, 51-56. In addition, plaintiffs allege that the Commission improperly relied on data pertaining to 1992 rather than 1990 and 1991 data. Id. at 29-30.

The statute frames the definition of an industry in terms of like product. See U.S. Steel Group v. United States, 18 CIT ___, ___, 873 F.Supp. 673, 682 (1994). Thus, in determining whether an industry in the United States is materially injured or threatened with material injury by reason of the subject imports, the Commission must first define the "like product" in order to determine the relevant "industry." See 19 U.S.C. § 1677(4)(A) (1988). Therefore, the Court rejects plaintiffs' claim that the industry should be defined without reference to "like product." Nor does Algoma Steel, 12 CIT at 518, 688 F.Supp. at 639, support plaintiffs' proposition. That case stands for a point not in dispute in this case. See Algoma, 12 CIT at 522-23, 688 F.Supp. at 644 (ITC accepts Commerce's determination of which merchandise is in the class of merchandise sold at LTFV and, in turn, determines which domestic industry produces products like the ones in the class defined by ITA and whether that industry is injured by the relevant imports).

The statute defines "like product" 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). In defining the "like product," the Commission typically considers (1) physical characteristics and uses, (2) interchangeability of the products, (3) channels of distribution, (4) customer and producer perceptions of the products, (5) the use of common manufacturing facilities and personnel, and (6) price. Aramide Maatschappij V.O.F. v. United States, 19 CIT ___, ___, Slip Op. 95-113 at 4, 1995 WL 379857 (June 19, 1995). See also Calabrian Corp. v. United States, 16 CIT 342, 346 n. 4, 794 F.Supp. 377, 382 n. 4 (1992); Torrington Co. v. United States, 14 CIT 648, 652, 747 F.Supp. 744, 749 (1990), aff'd 938 F.2d 1278 (1991).

Further, the Commission examines...