Tropicana Products, Inc. v. U.S.

• Decision Date: 12 April 2007
• Docket Number: Slip Op. 07-55.,Court No. 06-00109.
• Citation: 484 F.Supp.2d 1330
• Parties: TROPICANA PRODUCTS, INC., Plaintiff, and Louis Dreyfus Citrus, Inc., and Fischer S/A Agroindustria, Plaintiff-Intervenors, v. UNITED STATES, Defendant, and A. Duda & Sons, Inc., Citrus World, Inc., Florida Citrus Mutual, Southern Garden Citrus Processing Corp., and The Coca-Cola Company, Defendant-Intervenors.
• Court: U.S. Court of International Trade

484 F.Supp.2d 1330

TROPICANA PRODUCTS, INC., Plaintiff, and Louis Dreyfus Citrus, Inc., and Fischer S/A Agroindustria, Plaintiff-Intervenors, v. UNITED STATES, Defendant, and A. Duda & Sons, Inc., Citrus World, Inc., Florida Citrus Mutual, Southern Garden Citrus Processing Corp., and The Coca-Cola Company, Defendant-Intervenors.

Slip Op. 07-55.

Court No. 06-00109.

United States Court of International Trade.

April 12, 2007.

COPYRIGHT MATERIAL OMITTED

Neville Peterson, LLP (John M. Peterson, Catherine C. Chen, and George W. Thompson) for the plaintiff.

Vinson & Elkins, LLP (Christopher A. Dunn and Valerie S. Ellis) for the plaintiff-intervenor Louis Dreyfus Citrus, Inc.

Kalik Lewin (Robert G. Kalik and Brenna S. Lenchak) for the plaintiff-intervenor Fischer S/A Agroindustria.

Peter D. Keisler, Assistant Attorney General; Jeanne Davidson, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Michael J. Dierberg), for the defendant.

James M. Lyons, General Counsel, U.S. International Trade Commission (David A.J. Goldfine and Andrea C. Casson) for the defendant.

Barnes, Richardson & Colburn, Washington, DC (Stephen W. Brophy) for defendant-intervenor A. Duda & Sons, Inc., Citrus World, Inc., Florida Citrus Mutual, and Southern Gardens Citrus Processing Corp.

Crowell & Moring, LLP (Jeffrey L. Snyder and Alexander H. Schaefer) for the defendant-intervenor the Coca-Cola Company.

Before: Jane A. Restani, Chief Judge.

OPINION

RESTANI, Chief Judge.

This matter is before the court on Plaintiff Tropicana Products Inc.'s ("Tropicana") motion for judgment on the agency record pursuant to USCIT Rule 56.2. Tropicana seeks review of the final determination of the International Trade Commission ("Commission") in Certain Orange Juice from Brazil, USITC Pub. 3838, Inv. No. 731-TA-1089 (Mar.2006), List 1, P.R. Doc. 329 ("Final Determination"). Specifically, Tropicana challenges the Commission's determination that the industry in the United States producing conventional and organic frozen concentrated orange juice for further manufacturing ("FCOJM") and conventional and organic not-from-concentrate orange juice ("NFC") (collectively "certain orange juice") is materially injured by reason of imports of certain orange juice from Brazil. Fischer S/A Agroindustria ("Fischer") and Louis Dreyfus Citrus, Inc. ("Dreyfus") join the action as Plaintiff-Intervenors. A. Duda & Sons, Inc., Citrus World, Inc., Florida Citrus Mutual, Southern Gardens Citrus Processing Corp., and The Coca-Cola Co. join as Defendant-Intervenors. The court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000).

BACKGROUND

On December 27, 2004, several domestic producers of certain orange juice¹ filed a petition with the Commission and the Department of Commerce ("Commerce"), claiming that an industry in the United States was materially injured, or threatened with material injury, by reason of imports of certain orange juice from Brazil. Commerce instituted an antidumping duty investigation and found that certain orange juice from Brazil was being sold at less then fair value ("LTFV"). Certain Orange Juice from Brazil, 71 Fed.Reg. 2183 (Dep't Commerce Jan. 13, 2006) (notice of final determination of sales at less than fair value and affirmative final determination of critical circumstances). Thereafter, the Commission gave its final determination to Commerce.

Six commissioners participated in the final determination with three commissioners making an affirmative determination and three making a negative determination.² Pursuant to 19 U.S.C. § 1677(11) (2000), a tie vote is resolved in favor of an affirmative determination. Thus, the court will refer to the affirmative determination as the Commission's determination.

In determining that the domestic industry was materially injured by subject imports from Brazil, the Commission examined data from crop year ("CY") 2001/02 through CY 2004/05. The Commission found that the volume of the subject imports, both in absolute and relative terms, was significant over the period of investigation ("POI"). The Commission also found that the lower-priced subject imports prevented increases in prices for the domestic like product, which otherwise would have occurred to a significant degree. Although the spread of citrus diseases and the large number of hurricanes in 2004 and 2005 in Florida caused a substantial decline in the domestic production of round oranges, the Commission concluded that these factors did not negate the "causal nexus" between the subject imports and the poor financial performance of the domestic industry, because the total volume of subject imports exceeded the shortfall in domestic production. Tropicana appeals the determination on several grounds.

STANDARD OF REVIEW

The court will uphold the Commission's final determination in an antidumping duty investigation unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i).

DISCUSSION

To determine whether a domestic industry is materially injured by reason of a subject import, the Commission must find: (1) a "`present material injury or a threat thereof,'" and (2) causation of such harm by reason of subject imports. Hynix Semiconductor, Inc. v. United States, 431 F.Supp.2d 1302, 1306 (CIT 2006) (quoting Chr. Bjelland Seafoods A/S v. United States, 19 CIT 35, 37 (1995)). In so doing, the Commission "shall consider [three factors] — (I) the volume of imports of the subject merchandise, (II) the effect of imports of that merchandise on prices ... 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 in the United States." 19 U.S.C. § 1677(7)(B)(i)(I)-(III). Additionally, the Commission "may consider such other economic factors as are relevant to the determination. ..." 19 U.S.C. § 1677(7)(B)(ii).

Plaintiff and Plaintiff-Intervenors argue that the Commission's determination is not based on substantial evidence for several reasons. They first argue that data upon which the Commission relied to make its determination are not representative of the entire domestic industry. They then argue that the Commission failed to examine properly several other factors that undermine the determination that the domestic industry was materially injured by reason of the subject imports. The court first describes the relevant Commission findings and then addresses the parties' arguments regarding the sufficiency of the Commission's data from the domestic industry and the Commission's affirmative determination.

I. Findings by the Commission

A. Definition of the Domestic Industry

"Domestic industry" consists of "the producers as a whole of a domestic like product, or those producers whose collective output of a domestic like product constitutes a major proportion of the total domestic production of the product." 19 U.S.C. § 1677(4)(A). In cases involving agricultural products, such as that at issue, the Commission may include growers of a raw agricultural input within the domestic industry producing the processed agricultural product if:

(I) the processed agricultural product is produced from the raw agricultural product through a single continuous line of production; and

(II) there is a substantial coincidence of economic interest between the ... growers ... and the processors of the processed agricultural product based upon the relevant economic factors.

19 U.S.C. § 1677(4)(E)(i). The Commission found both factors of § 1677(4)(E) present in this case and thus defined the domestic industry to include both the domestic processors of certain orange juice and the domestic growers of round oranges.³ Final Determination, at 10-12.

After defining the domestic industry, the Commission obtained information from both domestic processors of certain orange juice and domestic growers of round oranges to conduct its determination. The Commission obtained data from twelve out of twenty processors of orange juice in Florida. The data obtained accounted for more than 90% of the domestic production of certain orange juice in CY 2004/05. Final Staff Report, at III-1. In contrast, the Commission obtained responses from a small percentage of 400 selected growers⁴ Certain Orange Juice from Brazil — Additions & Revisions to the Staff Report, Inv. No. 731-TA-1089 (Feb. 2, 2006), at VI-26, List No. 2, C.R. Doc. 439 ("Additions & Revisions"). Of those responding, half provided usable data. Id. Those reporting usable data accounted for approximately 12% of the U.S. production of oranges. Id.

B. Conditions of Competition

Several conditions of competition informed the Commission's "analysis of whether the domestic industry [was] materially injured by reason of subject imports from Brazil." Final Determination, at 14. The Commission first examined the supply conditions of the domestic industry, finding that the domestic processors of certain orange juice are almost wholly dependent on domestic growers, mostly in Florida, for their supply of round oranges because there is no economical way to import oranges. Id. The processors thus face yearto-year fluctuations in the supply of round oranges due to weather conditions and other factors such as citrus disease. Id. For example, during the POI, the Florida orange crop declined from 230 million boxes in CY 2001/02 to 203 million boxes in CY 2002/03, before increasing to 242 million boxes in CY 2003/04, which was the second largest Florida orange crop in history. Id. In the aftermath of Hurricanes Charley, Frances, and Jeanne, however, the Florida orange crop declined to 149.6 million boxes in 2004/05. Id. Because of this "inherent volatility in the domestic supply of round oranges, domestic producers of certain orange juice maintain relatively large bulk juice inventories.⁵ Id. at 15.

After the domestic...