Wieland-Werke Ag v. U.S.

• Decision Date: 07 November 2007
• Docket Number: Slip Op. 07-163.,Court No. 06-00135.
• Citation: 525 F.Supp.2d 1353
• Parties: WIELAND-WERKE AG, Prymetall GmbH & Co. KG, Schwermetall Halbzeugwerk GmbH & Co. KG and Wieland Metals, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Eagle Brass Co., Heyco Metals Inc., Luvata Buffalo, Inc., Olin Corporation-Brass Group, PMX Industries, Inc., Revere Copper Products, Inc., and Scott Brass, Defendant-Intervenors.
• Court: U.S. Court of International Trade

525 F.Supp.2d 1353

WIELAND-WERKE AG, Prymetall GmbH & Co. KG, Schwermetall Halbzeugwerk GmbH & Co. KG and Wieland Metals, Inc., Plaintiffs, v. UNITED STATES, Defendant, and Eagle Brass Co., Heyco Metals Inc., Luvata Buffalo, Inc., Olin Corporation-Brass Group, PMX Industries, Inc., Revere Copper Products, Inc., and Scott Brass, Defendant-Intervenors.

Slip Op. 07-163.

Court No. 06-00135.

United States Court of International Trade.

November 7, 2007.

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Arnold & Porter LLP, (Michael T. Shor and Jonathan S. Batten) for Plaintiffs Wieland-Werke AG, Prymetall GmbH & Co. KG, Schwermetall Halbzeugwerk GmbH & Co. KG, and Wieland Metals, Inc.

Charles A. St. Charles, Attorney-Advisor, James M. Lyons, General Counsel, Andrea C. Casson, Assistant General Counsel for Litigation, Office of the General Counsel, U.S. International Trade Commission, for Defendant United States.

Kelley Drye Collier Shannon, (David A. Hartquist, Jeffrey S. Beckington, and Kathleen W. Cannon) for Defendant-Intervenors Eagle Brass Co., Heyco Metals, Inc., Luvata Buffalo, Inc., Olin Corporation-Brass Group, PMX Industries, Inc., Revere Copper Products, Inc., and Scott Brass.

Before: WALLACH, Judge.

PUBLIC VERSION

OPINION

WALLACH, Judge.

I INTRODUCTION

Plaintiffs, Wieland-Werke AG ("Wieland-Werke"), Prymetall GmbH & Co. KG ("Prymetall"), Schwermetall Halbzeugwerk GmbH & Co. KG ("Schwermetall"), German producers and exporters of brass sheet and strip ("BSS"), and Wieland Metals, Inc. ("Wieland Metals"), a U.S. subsidiary of Wieland-Werke, move for judgment on the agency record, challenging the final determination of the U.S. International Trade Commission ("ITC" or "the Commission") in its five-year sunset review of certain antidumping and countervailing duty orders, as published in Brass Sheet and Strip from Brazil, Canada, France, Germany, Italy, and Japan, USITC Pub 3842, Inv. Nos. 701-TA-269 and 731-TA-311-314, 317, and 379 (Second Review) (March 2006) (Public Version), Final Edited BPI Version of the Commission's Views (Confidential Version) ("Views "), Defendant's Appendix, List 2, Doc. 183. Plaintiffs contest, first, the Commission's finding that German BSS imports are likely to have a discernible adverse impact¹ on the domestic BSS industry if the antidumping duty ("AD") order on German imports were revoked.² Plaintiffs also contest the Commission's determination that revocation of the orders in place with respect to the cumulated countries would likely lead to the continuation or recurrence of material injury to the United States domestic industry within a reasonably foreseeable time.

The court has jurisdiction pursuant to 28 U.S.C. § 1581(c). The Commission's findings are supported by substantial evidence and are otherwise in accordance with law.

II BACKGROUND

On February 19, 1987, the Commission determined that the BSS industry in the United States was being materially injured by less than fair value ("LTFV") imports of BSS from France;. Germany, Italy, and Sweden. Certain Brass Sheet and Strip from France, Italy, Sweden, and West Germany, USITC Pub. 1951, Inv. Nos. 701-TA-270 (Final) and 731-TA-313, 314, 316, and 317 (Final) (February 1987). Commerce subsequently issued AD orders on BSS from France, Germany, Italy, and Sweden, and a countervailing duty ("CVD") order on BSS from France. Antidumping Duty Order: Brass Sheet and Strip From the Federal Republic of Germany, 52 Fed.Reg. 6,997 (March 6, 1987), as amended by 52 Fed.Reg. 35,750 (September 23, 1987); France, 52 Fed.Reg. 6,995 (March 6, 1987); Italy, 52 Fed.Reg. 6,997 (March 6, 1987), as amended by 52 Fed.Reg. 11,299 (April 8, 1987); Sweden, 52 Fed.Reg. 6,998 (March 6, 1987). Countervailing Duty Order; Brass Sheet and Strip from France, 52 Fed.Reg, 6,996 (March 6, 1987).

The Commission initiated the first sunset review of these orders on February 1, 1999.³ Brass Sheet and Strip From Brazil and France; Brass Sheet and. Strip From Brazil, Canada, France, Italy, Korea, Sweden, Germany, Japan, and the Netherlands, 64 Fed.Reg. 4,892 (February 1, 1999). The Commission determined that revocation of the AD and CVD orders in place would likely lead to recurrence or continuation of material injury to the domestic industry within a reasonably foreseeable time. See Brass Sheet and Strip from Brazil, Canada, France, Germany, Italy, Korea, the Netherlands, and Sweden, USITC Pub. 3290, Inv. Nos. 701-TA-268, 270 (Review) and 731-TA-317 and 379-380 (Review) (April 2000). German producers did not participate in the first sunset review.

The Commission initiated this second sunset review of the disputed AD and CVD orders on March 31, 2005. Brass Sheet and Strip from Brazil, Canada, France, Germany, Italy, and Japan, 70 Fed.Reg. 16,519 (March 31, 2005). The German producers and the domestic BSS industry participated fully in the review. The Commission decided to conduct a full review of BSS from Germany based on the receipt of adequate responses from both the domestic and German respondent interested parties. Brass Sheet and Strip from Brazil, Canada, France, Germany, Italy, and Japan, Explanation of Commission Determinations on Adequacy (July 2005).

The Commission exercised its discretion to cumulate BSS imports from France, Germany, Italy, and Japan after concluding (1) that revocation of each AD order would likely have a discernible adverse impact on the domestic BSS industry, Views at 14-20, and (2) that the subject imports were likely to compete with the domestic like product if the AD orders on BSS imports from those countries were revoked,⁴ id,. at 20-23. The Commission ultimately determined that revocation of the orders would likely lead to continuation or recurrence of material injury to the domestic BSS industry within a reasonably foreseeable time. Id. at 31. Plaintiffs challenge the Commission's final determination, as well as certain aspects of the methodology employed by the Commission to make that determination. Plaintiffs' Initial Brief in Support of their Rule 56.2 Motion for Judgment on the Agency Record ("Plaintiffs' Motion") at 1-4.

First, Plaintiffs seek to broaden the scope of the "likely" standard pursuant to which the Commission conducts sunset reviews. Id. at 16; see 19 U.S.C. § 1675a. Plaintiffs contend that because the "likely" standard requires a probability — and not merely a possibility — that volume, price effects, and adverse impact will occur and increase, the evidence must show that it is a "rational economic option" to increase exports in order to support an affirmative determination. Plaintiffs' Motion at 16; Plaintiffs' Reply Brief in Support of their Rule 56.2 Motion for Judgment on the Agency Record ("Plaintiffs' Reply") at 1-2. It is this contention which underlies Plaintiffs' challenges to both the "discernible adverse' impact" component of the Commission's cumulation analysis and the Commission's likelihood of material injury analysis. Plaintiffs' Motion at 1-4; Plaintiffs' Reply at 1-2.

Specifically, Plaintiffs challenge the Commission's findings that if the orders were revoked: (1) German producers would have some incentive to increase BSS exports to the United States; (2) German producers would likely use their unutilized BSS production capacity to increase BSS exports to the United States; (3) increased BSS exports to the United States are likely, based on the "export-orientation" of German (and other subject) producers; and (4) German producers would likely sell BSS in the United States at prices significantly below prevailing U.S. producers' prices. Plaintiffs' Motion at 1-4. Plaintiffs characterize their challenge to each of these findings as "relevant to both [the Commission's] discernible adverse impact cumulation analysis and its likelihood of material injury analysis." Id. at 1. Plaintiffs assert that each of these findings are "unlawful" and, on this basis, argue that both the Commission's "discernible adverse impact" and ultimate "likelihood of material injury" determinations are not supported by substantial evidence. Id. at 4. Plaintiffs also challenge the Commission's "parallel and related findings" with respect to France, Italy, and Japan. Id. at 3-4. According to. Plaintiffs, "[b]ecause the Commission largely employed the same analysis and reasoning in its likely adverse impact cumulation analysis and likelihood of injury analysis with respect to Italy, France, and Japan as it did for Germany, such findings and conclusions are unlawful for the same reasons." Id. at 31.

III STANDARD OF REVIEW

In a sunset review, the court is required to uphold a determination by the Commission 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). A party "challenging the Commission's determination under the substantial evidence standard las chosen a course with a high barrier to reversal.'" Nippon Steel Corp. v, United States, 458 F.3d 1345, 1358 (Fed.Cir.2006) (internal citations omitted). Substantial evidence is defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. N.L.R.B., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) (citing Appalachian Elec. Power Co. v. N.L.R.B., 93 F.2d 985 (4th Cir.1938)). There must be "[a] rational connection between the facts found and the choice made" in an agency determination if it is to be characterized as supported by substantial evidence and in accordance with law. Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962). The court must not "displace the [agency's] choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo." Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 488, 71 S.Ct. 456, 465, 95 L.Ed. 456 (1951). Even when presented with "point[s]...