Far Eastern Textile Ltd. v. United States International Trade Commission , 25 Ct. Int'l Trade 999 ( 2001 )

Slip Op. 01-102
UNITED STATES COURT OF INTERNATIONAL TRADE
___________________________________
:
FAR EASTERN TEXTILE LTD., :
:
Plaintiff, :
:
v. :
: Court No. 00-06-00296
THE UNITED STATES INTERNATIONAL :
TRADE COMMISSION, : Public
: Version
Defendant, :
:
and :
:
ARTEVA SPECIALTIES S.a.r.l., :
d/b/a KoSa, and WELLMAN, INC., :
:
Defendant-Intervenors. :
___________________________________:
[ITC’s determination of material injury sustained.]
Dated: August 14, 2001
White & Case, LLP (William J. Clinton; Lyle B. Vander Schaaf;
Frank H. Morgan) for plaintiff.
Marc A. Bernstein, Acting Assistant General Counsel, Lyn M.
Schlitt, Office of General Counsel, United States International
Trade Commission, of counsel, (Mary Jane Alves), for defendant.
Collier Shannon Scott, PLLC (Paul C. Rosenthal, Kathleen W.
Cannon, David C. Smith, Jr., and Grace W. Kim) for defendant-
intervenor.
COURT NO. 00-06-00296 PAGE 2
OPINION
RESTANI, Judge:
Far Eastern Textile Ltd. (“Far Eastern”), respondent in the
underlying investigation, moves for judgment on the agency record
pursuant to USCIT Rule 56.2. At issue is the final determination
of the International Trade Commission (the “Commission”) in
Certain Polyester Staple Fiber from Korea and Taiwan, USITC Pub.
3300, Inv. Nos. 731-TA-825 to 826 (final) (May 2000), List 2,
C.R. Doc. 224 [hereinafter “Final Determination”]. Far Eastern
contests the Commission’s affirmative material injury
determination by arguing that its finding of substantial
competition between the foreign imports and the domestic like
product (1) is based on data that was misreported by petitioners
and (2) is not supported by substantial evidence given
dissimilarities among the types of polyester staple fiber
(“PSF”). Far Eastern also contests the Commission’s
determination of price depression.
JURISDICTION & STANDARD OF REVIEW
This Court has jurisdiction pursuant to 28 U.S.C. § 1581(c)
(1994). The Court will uphold the Commission’s determination in
antidumping investigations unless it is “unsupported by
substantial evidence in the administrative record or is otherwise
not in accordance with law.” 19 U.S.C. § 1516a(a)(2)(B)(i).
COURT NO. 00-06-00296 PAGE 3
FACTUAL & PROCEDURAL BACKGROUND
On April 2, 1999, E.I. DuPont de Nemours; Arteva Specialties
S.a.r.l., d/b/a KoSa (“KoSa”); Nan Ya Plastics Corp., America
(“Nan Ya”)1; Wellman, Inc.; and Intercontinental Polymers, Inc.,
filed a petition with the Commission and the Department of
Commerce (“Commerce”) alleging that imports of PSF from the
Republic of Korea and Taiwan are being, or are likely to be, sold
in the United States at less than fair value (“LTFV”), and that
such imports are both materially injuring and threatening further
material injury to an industry in the United States. See Certain
Polyester Staple Fiber From the Republic of Korea and Taiwan, 64
Fed. Reg. 23,053 (Dep’t Comm. 1999) (init. antidumping invest.).2
1
Nan Ya Plastics was not a petitioner in the investigation
involving Taiwan. In a letter dated May 4, 1999, Nan Ya Plastics
also withdrew as a petitioner in the investigation involving
Korea. In the same letter, DuPont withdrew as a petitioner in the
investigation involving Taiwan. See Certain Polyester Staple
Fiber from Korea and Taiwan, USITC Pub. 3197, Inv. Nos. 731-TA-
825 to 826 (prelim.) (May 1999), List 1, P.R. Doc. 61, at 1 n.2
[hereinafter “Preliminary Determination”].
2
In the April 29, 1999 notice of initiation, Commerce’s
definition of the scope of the investigation reads in relevant
part as follows:
Certain polyester staple fiber is defined as synthetic
staple fibers, not carded, combed or otherwise
processed for spinning, of polyesters measuring 3.3
decitex (3 denier, inclusive) or more in diameter. This
merchandise is cut-to-lengths varying from one inch (25
mm) to five inches (127 mm). The merchandise . . . may
be coated, usually with a silicon or other finish, or
not coated. Certain polyester staple fiber is generally
used as stuffing in sleeping bags, mattresses, ski
jackets, comforters, cushions, pillows, and furniture.
COURT NO. 00-06-00296 PAGE 4
The Commission instituted investigations effective the same date.
In May of 1999, the Commission preliminarily determined that
an industry in the United States is “materially injured” by
reason of less-than-fair-value imports of PSF from Korea and
Taiwan. Preliminary Determination at 1. The Commission had
considered whether certain types of PSF, specifically “low-melt
fiber,”3 “conjugate fiber,”4 “fiber made from recycled
materials,” and so-called “regen” fiber,5 should be defined as
separate like products. Id. at 5-11. The Commission found that
there was one domestic like product coextensive with the scope of
64 Fed. Reg. at 23,053.
3
“Low-melt” fiber is described as follows:
a bicomponent fiber comprised of a polyester core and a
sheath of copolymer polyester. Low melt is used to
bind conventional polyester staple fibers together to
form a nonwoven batt suitable for bulk uses such as
furniture stuffing. When heated, the outer copolymer
sheath melts at a lower temperature than its core or
conventional polyester staple fibers, and the melted
sheath acts as a glue, holding the polyester staple
fibers together.
Preliminary Determination at 6.
4
“Conjugate” fiber is described as follows:
a bicomponent fiber, with two polyesters used to create
a curled, or spiraled fiber. This spiral shape
provides characteristics to the conjugate fiber similar
to those that mechanical crimping gives to conventional
polyester staple fiber.
Preliminary Determination at 7-8.
5
“Regen” fiber is described in detail in the discussion
section.
COURT NO. 00-06-00296 PAGE 5
the investigations defined by Commerce, but indicated that it
would revisit the issue in the final phase of the investigation.
Id. at 11.
On October 22, 1999, the Commission solicited comments from
the parties on the draft producer, importer, purchaser, and
foreign producer questionnaires. In its May 15, 2000 final
determination, the Commission determined that two separate
domestic like products exist for merchandise covered by
Commerce's investigation, namely: (1) low-melt PSF and (2) all
other types of PSF not specifically excluded (collectively
designated “conventional PSF”). Final Determination at 3, 12.
The Commission majority found low-melt fiber to be a domestic
like product separate from the other polyester staple fibers, and
issued negative material injury and threat determinations with
respect to the domestic industry producing low-melt PSF. Final
Determination at 6-9, 28-36.6
With respect to “conventional” fiber, however, the
Commission issued an affirmative material injury determination.
Final Determination at 16-28. The Commission noted that for the
purposes of the final phase of the investigation, “respondents no
longer argue that regenerated fiber is a separate domestic like
6
Accordingly, the scope of the antidumping duty orders was
revised from that used in the investigations to exclude low-melt
PSF. See Certain Polyester Staple Fiber from Korea and Taiwan,
65 Fed. Reg. 33,807 (Dep’t of Comm May 25, 2000) (amd’d final
determ.).
COURT NO. 00-06-00296 PAGE 6
product.” Final Determination at 5 n.13. See also Letter from
Stein Fibers, Ltd. to Commission (Feb. 8, 2000), List 2, C.R.
Doc. 46.
On May 25, 2000, Commerce published its antidumping duty
order pursuant to the affirmative final determinations made by
Commerce and the ITC. Certain Polyester Staple Fiber from
Taiwan, 65 Fed. Reg. 33,807 (Dep’t Comm. 2000). Far Eastern
appeals the Commission’s final determinations of material
injury.7
Discussion
I. Material Injury Analysis
Under 19 U.S.C. § 1673d(b)(1), the Commission is charged
with making “a final determination of whether . . . an industry
in the United States (i) is materially injured, or (ii) is
threatened with material injury . . . by reason of imports, or
sales . . . for importation, of the [subject] merchandise.”
Section 1677(7)(B)(i) specifies that the Commission in making its
final material injury determination must consider the volume of
the subject imports, their effect on prices for the domestic like
product, as well as their impact on domestic producers of the
domestic like product.8 Pursuant to 19 U.S.C. § 1677(7)(B)(ii),
7
Far Eastern does not on appeal dispute the Commission’s
domestic like product determination.
8
Before engaging in this analysis, however, the Commission
must “cumulatively assess the volume and effect of imports of the
COURT NO. 00-06-00296 PAGE 7
the Commission may also "consider such other economic factors as
are relevant to the determination." No single factor, however,
is determinative and the Commission evaluates all relevant
economic factors "within the context of the business cycle and
conditions of competition that are distinctive to the affected
industry." 19 U.S.C. § 1677(7)(C).
Far Eastern contests the Commission’s affirmative material
injury determination by arguing that its general conclusion that
foreign imports compete with the domestic like product (1) was
based on “flawed” data regarding “regenerated fiber” and (2) was
not supported by substantial evidence. Far Eastern also contests
the Commission’s finding that underselling by subject imports
contributed to price depression.
A. Reliance on Questionnaire Responses
Far Eastern argues that the Commission unreasonably relied
on “flawed” data reported by the domestic producers regarding
their shipments of “regenerated fiber.”9 Far Eastern’s
subject merchandise from all countries with respect to which ...
petitions were filed . . . on the same day . . . if such imports
compete with each other and with domestic like products in the
United States market.” 19 U.S.C. § 1677(7)(G)(i). Far Eastern
does not directly challenge cumulation of data on the foreign
imports. Rather, it challenges the Commission’s finding that
foreign imports compete with the domestic like product insofar as
the finding underlies the ultimate material injury determination.
9
Far Eastern also challenges the Final Determination on the
ground that data reported by [ ] was found to have errors.
COURT NO. 00-06-00296 PAGE 8
contention that the data is “flawed” rests on the proposition
that petitioners ignored part of the definition given by the
Commission and reported as “regenerated fiber” what
“admittedly”10 should have been classified as “residual PSF.”11
This alleged misreporting, Far Eastern concludes, resulted in
distorted volume levels and skewed pricing comparisons that
formed the basis for the Commission’s conclusion that there was
substantial competition between the subject imports and the
domestic like product. Far Eastern Br. at 11. Far Eastern’s
arguments lack merit.
Far Eastern misconstrues the Commission’s definition of
“regenerated PSF.” The category “regenerated fiber” was defined
The Commission noted in the Final Determination, however, that
the errors were corrected pursuant to verification. Final
Determination at 28, n.123; Verification Report (April 18, 2000)
List 2, C.R. Doc. 232. Verifiable data were incorporated in the
final staff report. Memorandum INV-X-087, List 2, C.R. Doc. 38,
at VI-1 [hereinafter “Final Report”]. Data that were ultimately
unverifiable were clearly distinguished in the Final Report. See
Final Report at VI-11 to 13. In light of such clear
distinctions, the court cannot accept Far Eastern’s contention
that the Commission disregarded accurate figures in favor of data
known to be unverifiable.
10
Far Eastern cites and the record reveals no evidence that
the domestic industry “admitted” that the product it reported in
the regenerated fiber category did not in fact meet the
Commission’s definition of this term.
11
The designation “residual” PSF does not refer to a
category defined in the questionnaires. Rather, “residual” PSF
refers to what the Commission in the Final Determination labeled
any conventional PSF (i.e., certain PSF excluding “low-melt”
fiber) that did not satisfy the definition for either regenerated
or conjugate fiber.
COURT NO. 00-06-00296 PAGE 9
in the Commission’s instruction booklet as follows:
polyester staple fiber produced primarily from waste
polyester fibers but may also include other polyester
waste products such as non-fiber polyester solids. It
generally has inconsistent physical properties, such as
irregular color, denier, staple length, and crimp
court. It is generally sold without specifications,
guarantees, or warranties of any kind.
General Information, Instructions and Definitions for Commission
Questionnaires, Inv. Nos. 731-TA-825 to 826 (final) at 4, Far
Eastern Reply App., Tab 1, at 7 [hereinafter “Instructions”].
First, by its terms, the first sentence provides the only
absolute requirement to meet the definition. Thus, producers
were to report as “regenerated fiber” any PSF that primarily had
been regenerated from waste polyester staple fiber itself or
primarily was made from non-fiber (i.e., recycled) materials.12
The evidence supports the finding that domestic producers did in
fact manufacture PSF produced primarily from waste polyester
fibers or other polyester waste products during the POI, and
12
The Final Report clarified that certain PSF can be
classified according to raw materials as follows:
Staple fiber may be made from reacting ethylene glycol
and either terephthalic acid or its methyl ester; if so
produced, it is termed virgin PSF. Staple fiber may
also be made from recycled polyester, using either
consumer waste, such as polyethylene terephthalate
(PET) bottles, or industrial waste, such as polyester
chips or spun tow; such fiber is known as regenerated,
or recycled fiber.
Final Report at I-4.
COURT NO. 00-06-00296 PAGE 10
accurately reported this data to the Commission.13 See Letter to
Jozlyn Kalchthaler from Petitioners, April 11, 2000, KoSa’s App.,
Tab 6.
Second, Far Eastern ignores the use of the qualifier
“generally” with respect to the latter parts of the definition.
There is no support for the proposition that, in drafting
definitions, the Commission is prohibited from including
descriptive terms that indicate factors to be considered in
completing the questionnaire. The use of qualifiers indicates
that although the attributes that follow (e.g., inconsistent
physical properties, irregular color) factor into whether a
particular product can be deemed to fall within the definition,
the lack of such an attribute would not necessarily eliminate a
product from the category. This is not to say that the latter
part of the definition is meaningless and can be ignored.
Rather, it shows that for the purposes of the questionnaire, the
category “regenerated PSF” was intended to encompass what had
13
The Final Report stated that “[p]etitioners manufacture
PSF from polyester waste material, including tow waste, scraps,
filaments, polyester film, and PET bottles.” Final Report at I-
12 & n.35. The Final Report specified that [
].” Id. Far Eastern does not dispute these findings.
COURT NO. 00-06-00296 PAGE 11
been referred to in the preliminary determination as U.S.
produced “recycled fiber” and Korean “regen.”
Far Eastern’s “flawed data” argument is essentially a
belated attempt to convince the Commission that a separate
category for “recycled PSF” should have been included in the
questionnaire. In the preliminary phase of the investigations,
the Commission had analyzed product distinctions in four
categories: “low-melt PSF,” “conjugate PSF,” “PSF made from
recycled materials” and “regen PSF.”14 The distinction between
the latter two categories derived from an acknowledged difference
in inputs, rather than any inherent difference in physical
composition, end-uses, or any other factor used in determining
like product.15
Several respondents, not including Far Eastern, proposed
definitions of “regenerated fiber,” “low-melt fiber,” and
14
The category “regen” was described in the Preliminary
Determination as follows:
Regen is made exclusively from recycled or regenerated
materials, but is chemically identical to conventional
polyester staple fiber. Asian producers of regen tend
to be small firms, generally using inferior quality
equipment. The resulting regen polyester staple fiber
tends to be of a lower quality than conventional fiber;
regen has uneven coloration and inconsistent sizing and
may contain large chips of unprocessed polyester.
Preliminary Determination at 10.
15
Thus, conjugate fiber can be produced from regenerated
fiber or non-regenerated fiber. See Final Results at 22 n.88.
COURT NO. 00-06-00296 PAGE 12
“conjugate fiber” to be included with the questionnaires. One
respondent specifically proposed that, for the purposes of the
questionnaire, “regenerated fiber” be distinguished from
“recycled fiber,” which it described as a PSF “comparable in
quality and interchangeable with virgin polyester staple fiber
but using as its raw material recycled products made from
polyethylene terephthalatate (“PET”) such as soda bottles instead
of newly manufactured PET chip.” Commission App., List 1, P.R.
Doc. 80, at 3. The proposed definition for “regenerated PSF” was
as follows:
certain polyester staple fiber . . . produced primarily
from waste polyester fibers, or other polyester waste
product. It is typically off color, and may consist in
part of non-fiber polyester solids such as unprocessed
pieces of the waste feedstock. It is generally sold
without specifications, guarantees, or warranties of
any kind.
Id.In a letter dated November 1, 1999, petitioners disputed the
grounds for the proposed distinction, arguing, inter alia, that
inputs used to create “recycled” and “regenerated” fibers can be
and are in fact combined to produce a single resulting fiber.
Commission App., List 1, P.R. Doc. 88, at 4-5. The questionnaire
ultimately adopted a definition of regenerated fiber that was
similar to that proposed by respondents, but rejected “recycled
fiber” as a separate category. See Instructions, at 4, Far
Eastern Reply App., Tab 1, at 7. Such a grouping of markets
COURT NO. 00-06-00296 PAGE 13
segments is proper. See Makita Corp. v. United States, 974 F.
Supp. 770, 788 (Ct. Int’l Trade 1997) (“[N]either the statute nor
its legislative history requires the Commission to adopt a
particular analysis when the market has segments.”) (citation
omitted). See also BIC Corp. v. United States, 21 CIT 448, 453,
964 F. Supp. 391, 397 (1997)(“[W]hen it has reviewed
determinations in which the Commission has considered using
market segments, the court has deferred to the Commission’s
findings regarding the existence and importance of such
segments.”) (citing Acciai Speciali Terni, S.p.A. v. United
States, 19 CIT 1051 (1995)). Thus, the single category
“regenerated PSF” with broad descriptive terms was apparently
intended to include what had been referred to as “regen” and
“recycled fiber” to account for the lack of a clear dividing line
given the practice of blending the two types of fibers. Far
Eastern may not now obtain remand on the ground that the
Commission was wrong in not fully accepting a co-respondent’s
arguments. If Far Eastern had more persuasive arguments, it
could have made them at the appropriate time, but elected not to
do so.
In fact, the record shows that Far Eastern did not always
distinguish between PSF made from recycled material and PSF made
from PSF waste. In the Commission’s January, 2000 sales
verification at Far Eastern’s corporate headquarters, company
COURT NO. 00-06-00296 PAGE 14
officials represented that “[Far Eastern] does not differentiate
in the ordinary course of business between regenerated and
recycled inputs. Rather, they refer to all non-virgin inputs as
‘waste.’” Far Eastern Sales Verification Report (Feb. 11, 2000),
at 11, Commission App., List 2, C.R. Doc. 16, Exh. 2, at 2. In
its appeal, Far Eastern does not dispute that such
representations were made to the Commission. The Commission
properly relied on data that had been derived from reporting
according to definitions consistent with these representations.
B. Substitutability
The Commission’s affirmative material injury determination
with respect to “conventional fiber” was based in part on a
threshold finding that “conjugate fiber and regenerated fiber
compete to a substantial degree with all other conventional PSF
([designated] ‘residual PSF’) in the U.S. conventional PSF
market.” Final Determination at 19. See BIC, 964 F. Supp. at
398 (“In analysis of material injury, substitutability is one
factor in the evaluation of volume and price.”) (citation
omitted). Far Eastern contends that the underlying finding of
fungibility was not based on substantial evidence.
The Commission first acknowledged that “conjugate and
regenerated fiber may substitute for non-PSF products [such as
goose-down for “conjugate,” and foam and shoddy (i.e., reclaimed
COURT NO. 00-06-00296 PAGE 15
wool) for “regenerated fiber”] to some extent.” Final
Determination at 21-22. The Commission nonetheless made three
findings to conclude that there was “a large degree of
fungibility and direct competition between both of the types of
imported fiber [i.e., “conjugate PSF” and “regenerated PSF”] and
domestically produced PSF.” Id. at 22.16 These findings related
to the following product and industry characteristics: (1)
blending among types of conventional PSF; (2) product end-use;
and (3) interchangeability of conjugate fiber and regenerated
fiber with other certain PSF.
1. Blending
The Commission’s fungibility determination was based in part
on a finding that “purchasers’ blending practices indicate that
there are different mixtures of PSF that will result in the
desired end-product.” Final Determination at 22. The Commission
reasoned as follows:
Purchasers appear to be able to shift their blends to
16
To the extent the Commission relies on substitutability
in its material injury determination, the products in question
need not be direct substitutes, but they must be substantially --
rather than theoretically -- substitutable. See R-M Indus., Inc.
v. United States, 18 CIT, 219, 226 n.9, 848 F. Supp. 204, 210
n.9, 211 (1994) (noting differences among contexts in which
substitutability arises and holding that “[s]ection
1677(7)(C)(ii) permits a finding of injury where an imported
product of higher quality may not be directly substitutable but
nonetheless causes price depression or suppression for the lower
cost domestic product”).
COURT NO. 00-06-00296 PAGE 16
take account of differences among the types of
conventional PSF. For example, purchasers may use
greater quantities of lower-priced regenerated fiber
and lesser quantities of other types of fiber to
achieve a low price point. However, in such
situations, it is price concerns that drive the
blending decision.
Id. at 22. Far Eastern concedes that purchasers may blend
different types of PSF in different proportions. Far Eastern
maintains, however, that blending occurs because the different
types of PSF “complement” rather than displace one another, as a
result of marked quality differences among the types.17 Although
different proportions of types of PSF render the blend suitable
for different grades of applications (e.g., high-end furniture
vs. low-end furniture), this does not negate the fact that, as
the record shows, purchasers attempt to reach a lower price-point
on a product by substituting one type for another.18 Final
Report at II-11, 14-15. That the types are used in varying
17
Rather than cite to specific record evidence to support
its theory that the types of PSF complement each other, Far
Eastern relies on analogy. Because blending is according to
specific formulae, Far Eastern likens the types of PSF to
different ingredients in making a cake, i.e. flour and sugar.
This analogy necessarily fails because although the different
types of PSF have varying levels of quality, they provide
essentially the same ultimate function, e.g., filler, unlike
different ingredients in a recipe.
18
For example, Patrick J. Magrath, one of petitioners’
economic consultants, testified that “[t]here is pressure from
[purchasers’] end-users to hit certain price points, but it’s
also for them to lower their costs and maintain their profit
margins, so [blending is] driven by that. . . .” Final Hearing
Transcript (Mar. 28, 2000), List 1, P.R. Doc. 251, Far Eastern
App., Tab 2, at 65.
COURT NO. 00-06-00296 PAGE 17
proportions supports the conclusion that the types are
substitutes to a certain degree rather than complements.
Because a purchaser may change the proportion of PSF types in
order to meet a certain price point and still satisfies a demand
for a particular end-use, the Commission’s finding of competition
on this ground is supported by substantial evidence. See Mukand
Ltd. v. United States, 20 CIT 903, 904, 937 F. Supp. 910, 912-13
(1996) (finding of competition supported by substantial evidence
where low-priced subject merchandise is used in place of domestic
like product for applications in which quality is not critical).
2. End-use
The Commission found that
respondents have failed to identify a significant
market segment or end-use served by regenerated fiber
or conjugate fiber that is not served by residual PSF.
The large volume of imports of conjugate fiber and
regenerated fiber indicates that they are not serving
niche markets, but rather are competing to a large
degree with residual PSF.
Final Determination at 22. Although it is questionable whether
the Commission can determine solely from volume figures whether a
product serves a niche market or not, the Commission’s finding
regarding competition on the ground of similar end-use is
supported by substantial evidence. The Final Report states that
“PSF is principally used as fiberfill and is seldom visible. . .
. The majority of the subject fiber is used as stuffing in
COURT NO. 00-06-00296 PAGE 18
sleeping bags, mattresses, ski jackets, comforters, cushions,
pillows, and furniture. PSF used for fill is produced in many
variations for purposes of quality enhancement.” Final Report at
I-3. See also id. at I-7 (conjugate fiber end uses) and I-11 to
12 (regenerated fiber end uses). Far Eastern does not dispute
that all types of conventional PSF (i.e., certain PSF excluding
“low melt PSF,” which was found to serve primarily as a bonding
agent) are used as fiberfill, nor is there any testimony to the
contrary. Rather, Far Eastern asserts that the different types
of PSF correspond to different quality levels of end-uses. The
record supports Far Eastern’s statement that, in contrast to
regenerated fiber, conjugate fiber is generally “a
technologically advanced product suitable for high-end uses, with
better filling power and shape retention.” Final Determination
at 10; Final Report at I-7, II-5 to 8. The varying degrees of
quality within certain types of end-uses, however, does not
render unsupported by substantial evidence the Commission’s
conclusion that all conventional PSF is used for the similar
purposes described in the Final Report.
3. Interchangeability
The Commission relied on pricing data and questionnaire
responses to make an underlying finding of interchangeability
between subject imports of conventional PSF and the domestic like
COURT NO. 00-06-00296 PAGE 19
product. Final Determination at 22-23. Far Eastern disputes
this finding, arguing that “the evidence does not support, and
often contradicts, the Commission’s finding that subject imported
conjugate and regenerated fiber are substitutable and compete
with domestically produced conventional PSF.” Far Eastern Br. at
17.
The Commission first found that the “the pricing data do not
support the argument that conjugate fiber is superior to residual
PSF.” Final Determination at 22. Far Eastern attacks this
finding indirectly by asserting that a comparison between
conjugate fiber and conventional PSF is of limited probative
value because “domestic producer’s sales are concentrated in so-
called ‘residual PSF’ and higher-quality recycled fibers.” Far
Eastern Br. at 13. Simply because the volume of conjugate
produced in the United States was minimal does not necessarily
establish that pricing data for conjugate is unreliable so as to
preclude the Commission from making a comparison between
conjugate and other types of fiber. Minimal U.S. production of a
product sub-type does not undercut the Commission’s overall
material injury determination where, as here, the sub-type
represents a low percentage of total U.S. consumption of the
subject merchandise. Indeed, that a domestic producer did
produce one type of conjugate fiber (5-7 denier, hollow, slick)
during the POI -- and is capable of shifting capacity to produce
COURT NO. 00-06-00296 PAGE 20
more -- is evidence of direct competition, even if to a limited
extent, and therefore supports the Commission’s finding of
interchangeability.19
The Commission further found that “a significant number of
importers and purchasers indicated that conjugate fiber and other
certain PSF are interchangeable or somewhat interchangeable.”
Final Determination at 22-23. The Commission noted that “[f]our
[of four] domestic producers, four of fourteen importers, and
nine of thirty purchasers reported that conjugate fiber is
interchangeable with other certain PSF,” while “[t]wo importers
and five purchasers reported that conjugate fiber is somewhat
interchangeable with other certain PSF.” Final Determination at
23, n. 93 (citing Final Report at II-5 to II-8). The Commission
also found that:
the bulk of the questionnaire responses . . . indicate
that purchasers buy regenerated fiber because it is
less expensive. Therefore, in the absence of low-
priced regenerated fiber, many purchasers would likely
buy residual PSF. A majority of importers and
purchasers indicated that regenerated fiber and
residual PSF are interchangeable or somewhat
interchangeable.
19
The Final Report noted that [ ] is the only domestic
producer that has produced conjugate. Final Report at V-13,
Table V-5. Consumption of conjugate fiber “increased
significantly, by [ ] percent in quantity and [ ] percent
in value, during 1997-99. Final Report at IV-11, Table IV-6. [
] represented to the Commission that it had discontinued
production of conjugate as of March 2000, but that it planned to
start producing again if market conditions improve. Final Report
at V-13, Table V-5.
COURT NO. 00-06-00296 PAGE 21
Final Determination at 23. In support of its determination, the
Commission noted that all four domestic producers, five of
fifteen importers, and fifteen of thirty-eight purchasers
reported regenerated fiber to be “interchangeable” with other
certain PSF. In addition, three importers and five purchasers
considered regenerated fiber to be “somewhat interchangeable”
with other certain PSF.” Final Determination at 23 n.94 (citing
Final Report at II-11 to 15).20
A review of the comments given in response to the
questionnaires reveals that the figures for both conjugate and
regenerated fiber are accurate, yet because the results are
mixed, the evidence appears inconclusive with respect to
interchangeability. Nevertheless, where results are mixed, the
Court may not remand a determination by the Commission simply
because the evidence on the record may support two inconsistent
conclusions. See Grupo Industrial Camesa v. United States, 85
F.3d 1577, 1582 (Fed. Cir. 1996) (citing Consolo v. Fed. Mar.
Comm’n, 383 U.S. 607, 619-20 (1966)). Thus, the Commission’s
20
Far Eastern maintains that conjugate fiber is a superior
product that competes primarily with non-PSF products, especially
goose down. That conjugate fiber competes with non-PSF products
does not speak to the issue of whether a purchaser would be able
to substitute other types of PSF if the price of conjugate were
to increase substantially. Far Eastern offers no support for its
assumption that differences in quality necessarily indicate that
purchaser quality preferences are of such an extent that
substitution would not take place regardless of any price
differential.
COURT NO. 00-06-00296 PAGE 22
finding of a significant degree of interchangeability for both
conjugate and regenerated fiber is supported by substantial
evidence.
C. Price Effects
The Commission determined a significant volume of
underpriced subject imports of conventional PSF from Korea and
Taiwan can and did contribute to a significant degree to price
depression. Final Determination at 24-26; 19 U.S.C. §
1677(7)(C)(ii). The Commission found that “[t]he cumulated
imports of conventional PSF from Korea and Taiwan undersold the
domestic product in 162 out of 168 quarterly observations, or
96.4% of the time.” Final Determination at 25. The Commission
also found, inter alia, that prices of subject imports of
conventional PSF declined overall from 1997 to 1999. Id. Rather
than directly contesting the Commission’s finding of
underselling, Far Eastern contends that the Commission erred in
not attributing the price decline to a decrease in material
costs. Far Eastern, however, overlooks the fact that prices
declined at a faster rate than did costs.21 Furthermore, Far
Eastern has not pointed to any record evidence that would
21
Prices declined by 7.1% from 1997 to 1998, and by 13.8%
from 1998 to 1999, while raw material costs declined by 6.3% from
1997 to 1998, and 10% from 1998 to 1999. See Final Report at
Table VI-3.
COURT NO. 00-06-00296 PAGE 23
controvert the Commission’s observation that prices are not
directly based on material costs.22 Although Far Eastern is
correct -- and the Commission recognized -- that there is in fact
some correlation between raw material prices and the domestic
prices of PSF, see Final Report at Figures V-2 to 7, this
correlation is not of itself sufficient to exclude underselling
by subject imports as a cause of price depression.
II. Alleged Inconsistency between Material Injury Determinations
Far Eastern argues that the Commission’s analysis and
conclusions as to “low-melt” PSF are inconsistent with its
analysis and conclusions with respect to conventional PSF. The
record does not show any such inconsistency. The Commission
determined that there was a lack of interchangeability between
imported and domestically-produced “low-melt” PSF based on
physical differences, different end-uses, and responses by
purchasers and importers to the questionnaire. Final
Determination at 28-32. This determination was not, as Far
Eastern claims, predicated on a finding that no lost sales or
lost revenue allegations involved low-melt PSF.
Far Eastern asserts that Commissioner Bragg failed to
articulate the data and reasoning underlying her determination
22
Far Eastern concedes the lack of evidence of contracts
that establish price terms according to raw material prices. See
Far Eastern Br. at 36.
COURT NO. 00-06-00296 PAGE 24
that there was one domestic like product including “low-melt”
PSF. Where a majority of the commissioners render affirmative
determinations that are, as here, deemed supported by substantial
evidence and are in accordance with law, the Court need not reach
the propriety of a concurring commissioner’s determination, as
the ultimate determination would not be disturbed in any event.
Conclusion
The Commission’s final determination of material injury with
respect to conventional PSF was not based on flawed data and was
supported by substantial evidence. Accordingly, the Commission’s
determination is sustained.
_______________________
Jane A. Restani
Judge
DATED: New York, New York
This 14th day of August, 2001