Trent Tube Div., Crucible Materials v. US

• Decision Date: 20 June 1990
• Docket Number: No. 87-12-01189.,87-12-01189.
• Citation: 741 F. Supp. 921,14 CIT 386
• Parties: TRENT TUBE DIVISION, CRUCIBLE MATERIALS CORPORATION; Armco-Specialty Steel Division; Damascus Tubular Products; Allegheny Ludlum Corporation; Carpenter Technology Corporation; and United Steelworkers of America, AFL-CIO-CLC, Plaintiffs, v. UNITED STATES, Defendant, and Avesta Sandvik Tube AB and Avesta Stainless, Inc., Defendant-Intervenors.
• Court: U.S. Court of International Trade

741 F. Supp. 921

14 CIT 386

TRENT TUBE DIVISION, CRUCIBLE MATERIALS CORPORATION; Armco-Specialty Steel Division; Damascus Tubular Products; Allegheny Ludlum Corporation; Carpenter Technology Corporation; and United Steelworkers of America, AFL-CIO-CLC, Plaintiffs, v. UNITED STATES, Defendant and Avesta Sandvik Tube AB and Avesta Stainless, Inc., Defendant-Intervenors.

No. 87-12-01189.

United States Court of International Trade.

June 20, 1990.

COPYRIGHT MATERIAL OMITTED

Collier, Shannon, Rill & Scott (David A. Hartquist, Patrick B. Fazzone, Kathleen Weaver Cannon, Mary T. Staley and Nicholas D. Giordano, Washington, D.C.) for plaintiffs.

Lyn M. Schlitt, Gen. Counsel, James A. Toupin, Asst. Gen. Counsel, Office of the General Counsel, U.S. Intern. Trade Com'n (Timothy M. Reif and William T. Kane, Washington, D.C.) for defendant.

Freeman, Wasserman & Schneider (Jack Gumpert Wasserman and Patrick C. Reed, New York City) for defendant-intervenors.

OPINION AND ORDER

CARMAN, Judge:

Plaintiffs seek review of the final determination of the United States International Trade Commission (hereinafter Commission or ITC) that an industry in the United States is not materially injured by reason of imports of welded stainless steel pipe and tubes from Sweden. See Stainless Steel Pipes and Tubes from Sweden, USITC Pub. No. 2033, (Final) (Nov.1987) (hereinafter ITC Pub.2033). Notice of the ITC's final determination was published in 52 Fed.Reg. 45,256 (Nov. 25, 1987). Plaintiffs contend that three of the five Commissioners reached this negative determination in a manner which was unsupported by substantial evidence on the record and otherwise not in accordance with law.

BACKGROUND

In October of 1986, the Specialty Tubing Group filed a petition with the Commission and the Department of Commerce (hereinafter Department or Commerce) alleging that the industry in the United States producing welded and seamless stainless steel pipe and tube was materially injured or threatened with material injury by reason of imports from Sweden sold at less than fair value. While the Commission decided that the domestic industry producing welded stainless steel pipe and tubing was "still suffering material injury," it determined by a 3-2 vote that "there was no material injury by reason of less than fair value imports of welded pipe and tube from Sweden." ITC Pub. No. 2033 at 17.¹

CONTENTIONS OF THE PARTIES

Plaintiffs' Contentions

Plaintiffs make the following contentions:

(1) Chairman Liebeler erred in her determination:

(a) by basing her determination exclusively on the five factor test for determining causation which originated in Certain Red Raspberries from Canada, USITC Pub. No. 1707 at 11-19 (Final) (June 1985) (Additional Views of Vice Chairman Liebeler) (hereinafter ITC Pub. 1707);

(b) by failing in her causation analysis to address any of the factors outlined in 19 U.S.C. § 1677;

(c) by failing to provide any explanation for her findings with respect to import penetration, price trends and product homogeneity; and

(d) by premising her pricing analysis on a search for predatory intent.

(2) Vice Chairman Brunsdale erred in her determination:

(a) by basing her negative causation determination on an estimate of elasticity of supply in the domestic welded stainless steel pipe and tube industry that was based on elasticity estimates that were seriously outdated and not demonstrably relevant to the industry under investigation;

(b) by failing to provide an explanation for certain key elements of her negative causation determination;

(c) by failing to address certain factors related to causation outlined in 19 U.S.C. § 1677; and

(d) by identifying the causation standard as a question of whether the imports were a material cause of injury and failing to relate the imports to the indicia of injury suffered by the domestic industry.

(3) Commissioner Rohr erred in his determination:

(a) by identifying the causation standard as whether imports were a material cause of injury;

(b) in his analysis of the volume effect of the imports by failing to relate his causation determination to the indicia of material injury found by the Commission and by failing to address certain indicators of causation that the ITC was required to consider; and

(c) in his analysis of the price effect of the imports concerning import volume;

(d) failing to consider price suppression; and

(e) by dismissing overwhelming evidence of price underselling.

Contentions of Defendant ITC and Defendant-Intervenors

The ITC and defendant-intervenors contend that the ITC's determination was reasonable, supported by substantial evidence on the record and in accordance with law.

STANDARD OF REVIEW

In reviewing a final injury determination of the ITC, this Court must hold unlawful any determination unsupported by substantial evidence on the record or otherwise not in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1982). Substantial evidence has been defined as "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. Labor Board, 305 U.S. 197, 229, 59 S.Ct. 206, 216, 83 L.Ed. 126 (1938)). When applying the substantial evidence standard "the court may not substitute its judgment for that of the agency when the choice is `between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo ....'" American Spring Wire Corp. v. United States, 8 CIT 20, 22, 590 F.Supp. 1273, 1276 (1984) (quoting Universal Camera, 340 U.S. at 488, 71 S.Ct. at 465), aff'd sub nom. Armco, Inc. v. United States, 3 Fed.Cir. (T) 123, 760 F.2d 249 (1985).

CHAIRMAN LIEBELER

Five Factor Test

Plaintiffs contend that Chairman Liebeler erred by basing her determination exclusively on the five factor test and by failing to address any of the factors outlined in 19 U.S.C. § 1677. The Commissioner's five factor test considers (1) import penetration data; (2) high margin of dumping or subsidy; (3) homogeneity of the products; (4) evidence of declining domestic prices; and (5) barriers to entry (foreign supply elasticity). ITC Pub.2033 at 29-32. In applying the test to the investigation of stainless steel pipes and tubing from Sweden, Chairman Liebeler found: (1) import penetration to be low; (2) a moderate to high margin of dumping; (3) mixed evidence of homogeneity of product; (4) more or less steady domestic prices; and (5) an absence of barriers to foreign entries. Id.

Statutory requirements for the Commissioners to consider in making their determinations concerning material injury are set out in 19 U.S.C. § 1677(7)(B) and (C). These sections read in pertinent part as follows:

(B) Volume and consequent impact

In making its determinations under sections 1671b(a), 1671d(b), 1673b(a), and 1673d(b) of this title, the Commission shall 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.

(C) Evaluation of volume and of price effects

For purposes of subparagraph (B) —

(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.

19 U.S.C. § 1677(7)(B) and (C) (1982).

In her Additional Views, the Chairman stated:

The statute requires the Commission to examine the volume of imports, the effect of imports on prices, and the general impact of imports on domestic producers. The legislative history provides some guidance for applying these criteria. The five factors incorporate both the statutory criteria and the guidance provided by the legislative history. Each of these factors is evaluated in turn.

ITC Pub. 2033 at 28.

In comparing Chairman Liebeler's test with the statute it appears that while some of the requisite factors in section 1677(7)(B) and (C) have been addressed, others have not. For example, concerning section 1677(7)(B), it is obvious that she considered the volume of imports in coming to her conclusion of low import penetration. She also considered the effects of imports on United States prices when she concluded that domestic prices remained more or less steady. As for the impact of imports on domestic producers, that may have been a factor in the Chairman's evaluation of homogeneity of the product.

Turning to the evaluation of relative factors outlined in section 1677(7)(C), plaintiffs contend that factors included in section (iii) — "Impact on affected industry" — were not considered by...