Co-Steel Raritan, Inc. v. United States Int'l Trade Comm'n , 2005 CIT 63 ( 2007 )

Slip Op. 05 - 63
UNITED STATES COURT OF INTERNATIONAL TRADE
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CO-STEEL RARITAN, INC. et al., :
Plaintiffs, :
v. : Court No. 01-00955
UNITED STATES INTERNATIONAL TRADE :
COMMISSION,
:
Defendant.
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Opinion & Order
[Remand to the defendant in aftermath of its
joinder in intervenor-defendants' appeals
to the CAFC.]
Decided: June 7, 2005
Appearances1:
Collier Shannon Scott, PLLC (Paul C. Rosenthal, Kathleen W.
Cannon, R. Alan Luberda and John M. Herrmann) for the plaintiffs.
Lyn M. Schlitt, General Counsel, James M. Lyons, Deputy
General Counsel, and Karen Veninga Driscoll, U.S. International
Trade Commission, for the defendant.
Baker & McKenzie (Kevin M. O'Brien, Thomas Peele and Kristi
K. Hansen) for intervenor-defendant Alexandria National Iron and
Steel Company.
White & Case LLP (David P. Houlihan, Lyle B. Vander Schaaf,
Frank H. Morgan, Joseph H. Heckendorn and Jonathan Seiger) for
intervenor-defendant Siderurgica del Orinoco, C.A. ("Sidor").
AQUILINO, Senior Judge: The intervernor-defendants,
joined on appeal by the defendant, apparently persuaded two members
1
The names set forth, necessarily, are those of counsel who
contributed to final resolution of this case before this court per
slip opinion 02-59, 26 CIT 639, 244 F.Supp.2d 1349 (2002), and slip
opinion 02-113, 26 CIT 1131 (2002), and whose submissions then must
be revisited now, given the mandate of the court of appeals in
conjunction with Co-Steel Raritan, Inc. v. Int'l Trade Comm'n, 357
F.3d 1294 (Fed.Cir. 2004).
Court No. 01-00955 Page 2
of a three-judge panel of the Court of Appeals for the Federal
Circuit ("CAFC") to vacate this court's final judgment herein, if
not remand to the undersigned for
further proceedings . . .[to] consider the contention in
[plaintiffs'] original motion for judgment on the ad-
ministrative record that it did not address in Co-Steel
I . . . [,] that the Commission erred in concluding in
the preliminary determination that there was no reason-
able indication that wire rod imports from Egypt, South
Africa, and Venezuela would imminently exceed statutory
negligibility levels, whether considered individually or
collectively.
Co-Steel Raritan, Inc. v. Int'l Trade Comm'n, 357 F.3d 1294, 1317
(Fed.Cir. 2004).
I
This mandate, having made this case's "extraordinary
procedural posture"2 more unique, caused this court to call upon
counsel for possible, further guidance. Their reactions were,
respectfully, to require this opinion, e.g.:
Accordingly, at this point, the Court must resolve
the remaining issue that was not previously addressed in
this action - that is, the question of whether subject
imports from the three countries, either individually or
collectively, would imminently exceed statutory levels.
That issue has been fully briefed by the parties and was
subject to extensive discussion during the oral argument
before this Court held on June 20, 2002.
Letter of Collier Shannon Scott, PLLC, p. 1 (May 2, 2005).
2
Carbon and Certain Alloy Steel Wire Rod From Brazil, Canada,
Germany, Indonesia, Mexico, Moldova, Trinidad and Tobago, Turkey,
and Ukraine, USITC Pub. 3546, pp. 47, 49 (Oct. 2002)(Additional and
Dissenting Views of Commissioner Lynn M. Bragg). See, e.g.,
Georgetown Steel Co. v. United States, 29 CIT , Slip Op. 05-43
(April 1, 2005).
Court No. 01-00955 Page 3
But this entails a perception of the future, which is now
past. That is, this case contested defendant's preliminary deter-
mination that imports of steel wire rod from Egypt, South Africa
and Venezuela that were alleged to be sold in the United States at
less than fair value were negligible and therefore that its in-
vestigations with regard to those countries be terminated. Carbon
and Certain Alloy Steel Wire Rod From Brazil, Canada, Egypt,
Germany, Indonesia, Mexico, Moldova, South Africa, Trinidad and
Tobago, Turkey, Ukraine, and Venezuela, 66 Fed.Reg. 54,539 (Oct.
29, 2001). The period of those investigations was August 2000
through July 2001. And plaintiffs' motion for relief timely
interposed thereafter argued, among other things, (i) that defend-
ant's reliance upon data that were not available to them preceding
the filing of their petition was unlawful; (ii) that defendant's
conclusion that certain imports in question did not exceed in the
aggregate seven percent of all imports during the period of
investigation was erroneous; and (iii) that its determination that
imports from Egypt, South Africa and Venezuela would not imminently
exceed the statutory negligibility thresholds was arbitrary and
capricious.
The court's slip opinion 02-59 herein, 26 CIT 639, 244
F.Supp.2d 1349 (2002), denied relief as to point (i) but, as to the
second point, remanded to the defendant for reconsideration of its
termination of those investigations in the light of the Interna-
Court No. 01-00955 Page 4
tional Trade Administration ("ITA"), U.S. Department of Commerce's
related Notice of Preliminary Determination of Sales at Less Than
Fair Value: Carbon and Certain Alloy Steel Wire Rod from Germany
,
67 Fed.Reg. 17,384 (April 10, 2002). Neither that slip opinion 02-
59 nor the court's subsequent slip opinion 02-113, 26 CIT 1131(2002), which affirmed the results of that remand, reached or
otherwise resolved plaintiffs' third point regarding the threat of
surpassing negligibility thresholds.
As indicated, defendant's determination, as well as that
of the ITA, were both preliminary, which, of course, meant before
or in preparation for the main or final result and which was a
factor of the foregoing opinions. Threat also connotes timing; it
portends the future, which in this case, to repeat, is now part of
history.
II
Be the timewarp as it is, this court's review is still
based exclusively upon defendant's administrative record, as devel-
oped on or about October 2001. The statute governing its investi-
gations provided in part:
(24) Negligible imports
(A) In general
(i) Less than 3 percent
Except as provided in clauses (ii) and
(iv), imports from a country of merchandise
corresponding to a domestic like product iden-
Court No. 01-00955 Page 5
tified by the Commission are "negligible" if
such imports account for less than 3 percent
of the volume of all such merchandise import-
ed into the United States in the most recent
12-month period for which data are available
that precedes --
(I) the filing of the petition . . . or
(II) the initiation of the investigation
. . ..
(ii) Exception
Imports that would otherwise be negligi-
ble under clause (i) shall not be negligible
if the aggregate volume of imports of the mer-
chandise from all countries described in
clause (i) with respect to which investiga-
tions were initiated on the same day exceeds 7
percent of the volume of all such merchandise
imported into the United States during the ap-
plicable 12-month period.
* * *
(iv) Negligibility in threat analysis
Notwithstanding clauses (i) and (ii), the
Commission shall not treat imports as negligi-
ble if it determines that there is a potential
that imports from a country described in
clause (i) will imminently account for more
than 3 percent of the volume of all such mer-
chandise imported into the United States, or
that the aggregate volumes of imports from all
countries described in clause (ii) will
imminently exceed 7 percent of the volume of
all such merchandise imported into the United
States. The Commission shall consider such
imports only for purposes of determining
threat of material injury.
* * *
(C) Computation of import volumes
In computing import volumes for purposes of subpara-
graph[] (A) . . . , the Commission may make reasonable
estimates on the basis of available statistics.
Court No. 01-00955 Page 6
19 U.S.C. §1677(24). Defendant's analysis under subsection
1677(24)(A)(iv) has been reported as follows:
Egypt. The share of subject imports accounted for by
Egyptian wire rod for the period August 2000 - July 2001
was 1.4 percent. Egyptian subject imports’ share of
total imports was 2.0 percent in 1998, 0.8 percent in
1999, and 1.2 percent in 2000; the share was 0.9 percent
in interim 2001.[] Capacity utilization for the Egyptian
industry was at *** percent in 2000, and is *** in both
2001 and 2002.[] Inventories in Egypt ***.[] Given
Egypt’s very small share of total imports, *** level of
capacity utilization, and ***, we conclude that subject
imports from Egypt will not imminently exceed three
percent of total imports.
South Africa. During August 2000-July 2001, subject
imports from South Africa accounted for 2.6 percent of
total imports. South African subject imports’ share of
total imports was 1.8 percent in 1998, 2.0 percent in
1999, and 2.4 percent in 2000; the share was 2.6 percent
in interim 2001.[][] Although imports from South Africa
have increased over the period of investigation, and were
higher in interim 2001 as compared to interim 2000, they
have remained well under the three percent threshold
throughout the period of investigation. The record does
not suggest that they will exceed that threshold in the
imminent future.[] Given South Africa’s import share for
the period August 2000-July 2001, 2.6 percent, and that
its import share has not exceeded three percent at any
time during the period of investigation, we find that
South Africa’s share of total imports will not imminently
exceed three percent.
Venezuela. Venezuelan subject imports’ share of
total imports was 2.1 percent for the period August 2000
- July 2001. Venezuelan subject imports’ share of total
imports was 1.6 percent in 1998, 4.6 percent in 1999, and
2.7 percent in 2000; the share was 1.5 percent in interim
2001.[] The volume of subject imports from Venezuela has
decreased since its peak in 1999, and the volume of
subject imports from Venezuela was significantly lower in
interim 2001 (20,724 short tons) than in interim 2000
(48,440 short tons).[] Venezuelan production capacity was
*** in 2000, and is projected to *** in 2001 and 2002.[]
Inventories in Venezuela fell from 1998 to 2000, although
they were higher in interim 2001 compared with interim
2000.[] Given Venezuela’s import share, decreasing
volumes, *** capacity levels and *** inventories, we find
Court No. 01-00955 Page 7
that Venezuela’s share of total imports will not immi-
nently exceed three percent.[]
Aggregate. Given that we have found there is little
potential for significant growth in the share of imports
by any of the three subject countries, we conclude that
the aggregate share of these three countries, which was
6.1 percent for the period August 2000-July 2001, will
not imminently exceed seven percent. Accordingly, pur-
suant to section 733(a)(1),[] the antidumping duty
investigations for Egypt, South Africa, and Venezuela are
terminated by operation of law.
USITC Pub. 3456, pp. 9-11 (Oct. 2001) (footnotes and confidential
data omitted).
The plaintiffs consider this analysis to be arbitrary and
capricious, an abuse of discretion, and otherwise not in accordance
with law. They argue that the volume of imports from South Africa
and Venezuela will imminently exceed three percent each. They al-
so project an aggregate volume exceeding seven percent for the
imports from the three countries combined.
In American Lamb Co. v. United States, 785 F.2d 994, 1001
(Fed.Cir. 1986), the court opined that a negative preliminary
determination under the foregoing statute issue
only when (1) the record as a whole contains clear and
convincing evidence that there is no material injury or
threat of such injury; and (2) no likelihood exists that
contrary evidence will arise in a final investigation.
That opinion was reaffirmed in this matter per Co-Steel Raritan,
Inc. v. Int'l Trade Comm'n, 357 F.3d at 1310, quoting the Uruguay
Round Agreements Act, Statement of Administrative Action ("SAA"),
H.R. Doc. No. 103-316, vol. 1, p. 857 (1994), to wit:
Court No. 01-00955 Page 8
. . . The Commission's standard regarding negligible
imports in preliminary investigations shall be the same
as its standard for material injury determinations in
these investigations, as set forth in American Lamb Co.
v. United States, 785 F.2d 994 (Fed.Cir. 1986).
In doing so, the court stressed the need to examine the "record as
a whole", "the record at the time the Commission renders its pre-
liminary determination". 357 F.3d at 1314.
A
Examination of that record at bar as a whole does not
reveal any potential that imports from Egypt could have imminently
accounted for more than three percent of the volume of all subject
merchandise imported into the United States.
B
With regard to imports from Venezuela, the plaintiffs
contend that the defendant
discounted projected increases in exports in 2001 by
Sidor because it found that interim data for the imports
in the first half of 2001 were lower than data for the
comparable period of 2000. See List 1, Doc. 55 at 10-11
n. 54; List 2, Doc. 32 at 16 n. 54 (App. 1).
Plaintiffs' Brief, p. 35. Accepting this contention as correct3,
3
See USITC Pub. 3456, pp. 10-11 n. 54 (Oct. 2001):
The Commission has received data from Venezuelan
producer and respondent Sidor . . ., which accounted for
*** percent of 2000 imports from Venezuela to the United
States, according to official Commerce statistics. . . .
Sidor reported projected increased exports to the United
States in 2001 and 2002 (*** short tons in 2001, and ***
short tons in 2002). . . . Actual 2001 interim import
(footnote continued)
Court No. 01-00955 Page 9
however, does not amount to abuse of the discretion that permits
the defendant to "make reasonable interpretations of the evidence
and to determine the overall significance of any particular factor
or piece of evidence". Maine Potato Council v. United States, 9
CIT 293, 300, 613 F.Supp. 1237, 1244 (1985). Moreover, it is
beyond cavil that the Commission is entitled to supple-
ment information from official statistics with the
information that it gathers during its own investigation,
and -- after weighing the evidence -- to choose to rely
upon one set of facts over the other. Indeed, the
Commission routinely relies on information it gathers in
the course of its investigations, even when that data
conflict[] with other official statistics on the record;
and the Commission has been repeatedly upheld when it has
done so. See, e.g., Texas Crushed Stone Co. v. United
States, 17 CIT 428, [438,] 822 F.Supp. 773, 781 (1993),
aff’d, 35 F.3d 1535 (Fed.Cir. 1994) . . ..
Al Tech Specialty Steel Corp. v. United States, 27 CIT __, __, Slip
Op. 03-164, p. 22 (Dec. 16, 2003). As indicated above, the
defendant did not rely solely on the finding of decreasing volume,
it also found support in data concerning production capacity and
inventory levels. In short, it cannot be said that the agency did
not articulate a "rational connection between the facts found and
the choice made". Bowman Transp., Inc. v. Arkansas-Best Freight
Sys., Inc., 419 U.S. 281, 285 (1974), quoting Burlington Truck
Lines, Inc. v. United States, 371 U.S. 156, 168 (1962). And, not-
withstanding the exporter’s estimates and plaintiffs’ proposed
data, however, show significantly lower levels in 2001
than the comparable period in 2000. In 2000, there were
84,957 short tons of subject imports from Venezuela,
accounting for a 2.7 percent share of total imports.
Citations and confidential data omitted.
Court No. 01-00955 Page 10
calculations based thereon, the court is constrained to "uphold a
decision of less than ideal clarity if the agency’s path may
reasonably be discerned". Id. at 286, citing Colorado Interstate
Gas Co. v. FPC, 324 U.S. 581, 595 (1945). See also Ceramica Regio-
montana, S.A. v. United States , 810 F.2d 1137, 1139 (Fed.Cir.
1987); Caribbean Ispat Ltd. v. United States, 29 CIT , , Slip
Op. 05-37, p. 13 (March 22, 2005), appeal docketed, No. 05-1400
(Fed.Cir. May 25, 2005).
C
That seemingly-descending path from Venezuela, however,
is a short one that does not reach the ascending imports from South
Africa. In reporting that the "record does not suggest that they
will exceed th[e] threshold in the imminent future", the defendant
apparently relied on those imports "hav[ing] remained well under
the three percent threshold throughout the period of investiga-
tion", repeated two sentences later viz. "its import share has not
exceeded three percent at any time during the period of investiga-
tion". USCIT Pub. 3456, p. 10. The plaintiffs disagree and direct
this court’s attention to that part of the record reflecting the
increasing import volumes of 1.8 percent in 1998, 2.0 percent in
1999, 2.4 percent in 2000, and 2.6 percent in interim 2001, arguing
that
[n]othing in the import statistics referenced or other-
wise in the record provides any reason to believe that
the increasing import trends observed would reverse
themselves or cease.
Plaintiffs’ Brief, p. 39.
Court No. 01-00955 Page 11
The court cannot disagree with this thesis. Indeed, the
defendant only cursorily acknowledges the increasing rate of
imports. In view of that obvious trend, the court cannot and
therefore does not accept as controlling the simple fact that they
have not yet exceeded the negligibility threshold. Although a
commissioner in another investigation cautioned that the agency is
without a clear statutory directive in assessing imminent non-
negligibility4, she did point out that the "SAA . . . indicates
that rates of import growth can be examined"5, to wit:
. . . Import volumes at the conclusion of the 12-month
period examined for purposes of considering negligibility
may be below the negligibility threshold, but increasing
at a rate that indicates they are likely to imminently
exceed that threshold during the period the Commission
examines in conducting its threat analysis.6
While it is generally within defendant's discretion to
weigh different factors as it deems appropriate, that authority
necessarily is based upon the existence of more than one factor,
which is not this case, wherein the plaintiffs attempt to fill the
4
Stainless Steel Wire Rod From Germany, Italy, Japan, Korea,
Spain, Sweden, and Taiwan, USITC Pub. 3126, p. 36 (Sept. 1998)
(Additional and Consenting Views of Commissioner Carol T.
Crawford)("While 'imminent' clearly indicates a forward-looking
analysis, there is no specific guidance from the statute").
5
Id.6
SAA, p. 856. It appears as if some factors considered by
commissioners derive from those found in 19 U.S.C. §1677(7)(F),
which help determine threat of material injury. See, e.g., Nippon
Steel Corp. v. United States, 29 CIT , , Slip Op. 05-38, pp.
5-10 (March 23, 2005), appeal docketed, No. 05-1404 (Fed.Cir. May
27, 2005).
Court No. 01-00955 Page 12
void in defendant’s analysis by extrapolating from the raw data,
indicative of the increasing rate of imports, volume projections of
their own. In estimating the denominator in the applicable ratio,
they annualize total imports from interim 2001 and thus, as pointed
out by the defendant, do not account for putative increases in
South African exports. For the first time, the defendant offers an
approach of its own, stating that,
in the event that the Court wishes to consider Plain-
tiffs’ claim that imports from South Africa will increase
at thirty percent per annum, because they have done so
historically from 1998 to 2000, the Court should also
take into consideration the historic increase over that
period in overall import volume. Plaintiffs’ calcula-
tions do not take into account that overall imports in-
creased at an average rate of approximately 11 percent
per year from 1998 to 2000. . . . If South African
imports increased by thirty percent in 2001 relative to
2000 levels, as they have done from 1998 to 2000, they
would be 98,036 short tons (approximately 20,000 tons
higher than 2000 levels). If overall import levels
increased 11 percent from 2000 to 2001 as they have done
from 1998 to 2000, they would equal 3,436,239 short tons.
Imports from South Africa of 98,036 short tons would
comprise 2.8 percent of overall imports . . ..
Defendant's Opposition Memorandum, p. 46 n. 98. In their reply,
the plaintiffs maintain that even
if the Commission's proposed denominator is used in lieu
of the annualized figure that the domestic industry
relied upon, a significant increase in the import share
for South Africa is also apparent.
Plaintiffs' Reply Brief, p. 25 n. 19. The court concurs.
When considering the record evidence, such as it is, in
this light, the court strains to discern a supposition, let alone
Court No. 01-00955 Page 13
clear and convincing evidence, of no potential that imports from
South Africa will imminently account for more than three percent of
all subject merchandise imported into the United States.7 A rough
estimate makes it only a matter of a year or two before the three-
percent threshold could be exceeded.
That this timeframe falls within the meaning of imminent
finds support in case law. In sustaining defendant's affirmative
threat-of-material-injury determination, the court in Asociacion de
Prod. de Salmon y Trucha de Chile AG v. U.S. Int'l Trade Comm’n, 26
CIT 29, 39, 180 F.Supp.2d 1360, 1371 (2002), concluded that the
producers’ ability to increase shipments to this country "within
one to two years" qualified as imminent. The court reasoned that
"[n]o bright-line test exists to determine when injury is imm-
inent."
. . . The term does not necessarily mean, as the Asocia-
ción argues, immediate, as the statute does not establish
any specific time limit governing when a potential action
can be characterized as imminent.
26 CIT at 39, 180 F.Supp.2d at 1371-72.
The defendant apparently does not consider this inter-
pretation of imminent to fit the facts herein, maintaining that
"[t]here is no indication in the record that imports from South
Africa will 'imminently' jump to three percent". Defendant's Op-
position Memorandum, p. 46. Such a "jump", however, is evident on
7
Acknowledging Commissioner Bragg’s dissenting view that they
would imminently do just that, the majority itself noted "sharply
increasing trends over the period reviewed". USITC Pub. 3456, p.
9 n. 43.
Court No. 01-00955 Page 14
the record developed.8 Simply concluding that the fact that those
8
In its Views, the majority notes that the
Commission only received information from one out of
three producers of wire rod in South Africa, Scaw Metals.
Scaw Metals reported that it accounted for *** percent of
South African production of wire rod, and did not export
to the United States during the period examined. . . .
Scaw Metals is not operating at a high level of capacity
utilization, and its production is projected to increase
*** in 2001 and 2002. However, it is projecting in-
creased shipments to non-U.S. markets, and does not pro-
ject that it will begin exporting to the United States.
Id. at 10 n. 48 (citation and confidential data omitted).
While projecting increased exports to other markets does not
necessarily bolster a trend of increasing U.S. imports, such ca-
pacity to ship elsewhere is certainly not inconsistent therewith.
Furthermore, the court does not now need to address whether
the lack of questionnaire responses on behalf of other South
African exporters should have precluded a determination that "no
likelihood exists that any contrary evidence will arise in a final
investigation". Plaintiffs’ Brief, p. 41, quoting American Lamb
Co. v. United States, 785 F.2d 994, 1001 (Fed.Cir. 1986)(emphasis
in original). On its face, SAA is permissive of incomplete infor-
mation in deciding negligibility:
The Commission will continue its current practice of
determining negligibility on the basis of each like
product that it designates in an antidumping or
countervailing duty investigation. To make such a deter-
mination, the Commission will need information concerning
the volume of total imports in addition to the volume of
imports from the country(ies) subject to the investi-
gation. The Commission may not have access to either
complete questionnaire data or official import statistics
conforming exactly to the Commission’s like product(s)
designations, particularly in preliminary investigations.
Therefore, . . . [1677](24)(C) permits the Commission to
make reasonable estimates on the basis of available
statistics.
SAA, p. 856. Sound policy, however, does not permit a respondent
to delay or avoid answer of a questionnaire in an attempt to
benefit from a record (without such response) that might be more
favorable, and even lead to premature termination of an
investigation.
Court No. 01-00955 Page 15
from South Africa did not actually exceed three percent during the
period of investigation is a better indicator of the future than
their increasing rate over recent years does not comport with the
kind of reasonable estimates contemplated by the statute, supra.
III
In view of the foregoing, plaintiffs' motion for judgment
on the agency record must be granted to the extent of remand to the
defendant to (a) reconsider its preliminary determination that wire
rod imports from South Africa will not imminently exceed three
percent of the volume of all such merchandise imported into the
United States and (b) pinpoint the clear and convincing evidence on
the record, if there is any, that there is little potential that
the imports from South Africa and those from Egypt and Venezuela,
collectively, will not imminently exceed seven percent. The de-
fendant may have until September 9, 2005 to carry out this mandate
and to report the results thereof to the undersigned, whereupon the
plaintiffs and the intervenor-defendants may serve and file written
comments thereon on or before September 26, 2005.
So ordered.
Decided: New York, New York
June 7, 2005
Thomas J. Aquilino, Jr.
Senior Judge