Siemens Energy, Inc. v. United States , 992 F. Supp. 2d 1315 ( 2014 )

Slip Op. 14- 66
UNITED STATES COURT OF INTERNATIONAL TRADE
_________________________________
:
SIEMENS ENERGY, INC., et al., :
:
Plaintiffs, :
:
v. : PUBLIC VERSION
: Before: Mark A. Barnett, Judge
UNITED STATES, :
: Consol. Court No. 13-00104
Defendant, :
:
and :
:
WIND TOWER TRADE COALITION, :
:
Defendant-Intervenor. :
________________________________ :
OPINION
[Plaintiffs challenge numerous aspects of the United States International Trade
Commission’s affirmative determination in the final injury investigation. The court
denies Plaintiffs’ motions for judgment on the agency record.]
6/17/2014
Dated: ______________
Elliot J. Feldman, Baker Hostetler, of Washington, DC, argued for plaintiff Siemens
Energy, Inc. With him on the brief was Michael S. Snarr.
Ned H. Marshak, Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, of
Washington, DC, argued for plaintiffs Titan Wind Energy (Suzhou) Co., Ltd., CS Wind
Tech Co., Ltd., CS Wind Vietnam Co. Ltd., and Chengxi Shipyard Co., Ltd. With him on
the brief were Bruce M. Mitchell, Max F. Schutzman, Andrew B. Schroth, Andrew T.
Schutz, and Kavita Mohan.
Michael K. Haldenstein, Attorney, Office of the General Counsel, U.S. International
Trade Commission, of Washington, DC, argued for defendant. With him on the brief
Court No. 13-00104 Page 2
were Dominic L. Bianchi, General Counsel, and Neal J. Reynolds, Assistant General
Counsel for Litigation.
Daniel B. Pickard, Wiley Rein LLP, of Washington, DC, argued for defendant-intervenor.
With him on the brief were Alan H. Price, Robert E. DeFrancesco, III, and Usha
Neelakantan.
Barnett, Judge: Plaintiffs, Siemens Energy, Inc. (“Siemens”), Titan Wind
Energy (Suzhou), CS Wind Tech, CS Wind Vietnam, and Chengxi Shipyard
(collectively, “Titan”), move, pursuant to USCIT R. 56.2, for judgment on the agency
record, challenging the United States International Trade Commission’s (“Commission”
or “ITC”) affirmative determination in the final injury investigations in antidumping and
countervailing duty investigations concerning utility scale wind towers (“wind towers”)
from the People’s Republic of China (“China”) and in an antidumping investigation of
wind towers from the Socialist Republic of Vietnam (“Vietnam”) published in Utility Scale
Wind Towers from China and Vietnam, 78 Fed. Reg. 10,210 (ITC Feb. 13, 2013) (“Final
Determination”), and the accompanying memorandum, Utility Scale Wind Towers from
China and Vietnam, USITC Pub. 4372, Inv. Nos. 701-TA-486 and 731-TA-1195-1196
(Final) (Feb. 2013) (“Views of the Commission” or “Views”). 1 For the reasons stated
below, the court denies Siemens’ and Titan’s motion.
1All citations to the Views of the Commission are to the confidential version of the
document. All six Commissioners joined in sections I-VI of the Views. Section VII of the
Views (“Material Injury By Reason of Subject Imports”) represents the views of
Chairman Williamson and Commissioner Aranoff. Commissioner Pinkert issued a
separate threat of injury determination, which will be cited hereafter as “Pinkert Views.”
Court No. 13-00104 Page 3
BACKGROUND AND PROCEDURAL HISTORY
On December 29, 2011, the Wind Tower Trade Coalition 2 filed petitions
with the United States Department of Commerce (“Commerce”) and the Commission,
seeking the imposition of antidumping and countervailing duties on wind towers
imported from China and antidumping duties on wind towers from Vietnam. Commerce
issued notices initiating investigations on January 24, 2012. See Utility Scale Wind
Towers from the People’s Republic of China and the Socialist Republic of Vietnam, 77
Fed. Reg. 3440 (Dep’t Commerce Jan. 24, 2012) (initiation of antidumping duty
investigations); Utility Scale Wind Towers from the People’s Republic of China, 77 Fed.
Reg. 3447 (Dep’t Commerce Jan. 24, 2012) (initiation of countervailing duty
investigation). Following a preliminary investigation, the Commission issued a
preliminary determination on February 13, 2012, voting in a 5-0 decision that there was
a reasonable indication that an industry in the United States was threatened with
material injury by imports of wind towers from China and Vietnam. Utility Scale Wind
Towers from China and Vietnam, 77 Fed. Reg. 9700 (ITC Feb. 17, 2012) (preliminary
determination).
In the final investigation, the Commission relied on data from certified
questionnaire responses from foreign producers of subject imports and from U.S.
importers and domestic producers of the like product. The period of investigation
2The Wind Tower Trade Coalition consists of four domestic producers, Broadwind
Towers, Inc.; DMI Industries; Katana Summit LLC; and Trinity Structural Towers, Inc.
Court No. 13-00104 Page 4
(“POI”) spanned 2009 through the first six months of 2012 (“interim 2012”). Views at 9
n.30. Six domestic producers submitted questionnaire responses, accounting for the
vast majority of U.S. shipments of wind towers during 2011. 3 Five Chinese and two
Vietnamese producers submitted questionnaire responses, providing data for almost all
subject imports during the POI. 4 Eleven U.S. importers submitted questionnaire
responses, representing over 95 percent of subject imports during the POI. 5
Relying on this data, the Commission reached a divided final
determination. Four Commissioners found “no material injury,” and two Commissioners
made affirmative determinations on the basis of “material injury.” Three Commissioners
found “no threat of material injury,” and one made an affirmative determination on the
basis of “threat of material injury.” 6 Combined, the two affirmative determinations based
on material injury, by Chairman Williamson and Commissioner Aranoff, and the one
affirmative determination based on threat of material injury, by Commissioner Pinkert,
resulted in a final affirmative determination that the domestic industry was materially
injured or threatened with material injury by reason of Chinese and Vietnamese imports
of wind towers.
3
The six domestic producers accounted for more than [[ ]] percent of U.S. shipments
during 2011. Views at 4 (citing Confidential Staff Report, INV-LL-002 (Jan. 7, 2013)
(revised by INV-LL-006, Jan. 11, 2013) (“Staff Report”) at III-1 n.1).
4
Views at 4 (citing Staff Report at VII-5, VII-11).
5
Views at 4 (citing Staff Report at IV-1).
6
The two Commissioners who made affirmative determinations on the basis of material
injury did not make a threat of material injury determination.
Court No. 13-00104 Page 5
The Commission defined wind towers as “large tubular steel towers that
are part of wind turbines.” Views at 6. It elaborated:
Wind turbines convert the mechanical energy of wind to electrical energy
and are comprised of three main components – the nacelle, rotor, and
tower. The nacelle houses the wind turbine’s main power generation
components (the gearbox, generator, and other components), while the
rotor typically consists of three blades and the hub. The nacelle sits on top
of the wind tower. . . . [W]ind towers within the scope of these investigations
are 50 meters or more in height and designed to support the nacelle and
rotor blades in a wind turbine with a minimum rated electrical power
generation capacity in excess of 100 kilowatts. 7
7 Commerce defined the scope of the imported merchandise under investigation in
further detail, as including:
[C]ertain wind towers, whether or not tapered, and sections thereof. Certain
wind towers are designed to support the nacelle and rotor blades in a wind
turbine with a minimum rated electrical power generation capacity in excess
of 100 kilowatts (‘‘kW’’) and with a minimum height of 50 meters measured
from the base of the tower to the bottom of the nacelle (i.e., where the top
of the tower and nacelle are joined) when fully assembled.
A wind tower section consists of, at a minimum, multiple steel plates rolled
into cylindrical or conical shapes and welded together (or otherwise
attached) to form a steel shell, regardless of coating, end-finish, painting,
treatment, or method of manufacture, and with or without flanges, doors, or
internal or external components (e.g., flooring/decking, ladders, lifts,
electrical buss boxes, electrical cabling, conduit, cable harness for nacelle
generator, interior lighting, tool and storage lockers) attached to the wind
tower section. Several wind tower sections are normally required to form a
completed wind tower.
Wind towers and sections thereof are included within the scope whether or
not they are joined with nonsubject merchandise, such as nacelles or rotor
blades, and whether or not they have internal or external components
attached to the subject merchandise.
Specifically excluded from the scope are nacelles and rotor blades,
regardless of whether they are attached to the wind tower. Also excluded
Court No. 13-00104 Page 6
Views at 6 (citing Staff Report at I-8 to I-9). Despite limited interchangeability between
wind towers manufactured to different original equipment manufacturers’ (“OEMs”)
specifications, the Commission found that wind towers within the scope of the
investigation constituted a single domestic like product because they shared common
physical characteristics and uses, channels of distribution, manufacturing facilities,
production processes and employees, and producer and customer perceptions. Views
at 7-8. The Commission further determined that subject imports compete with each
other and the domestic like product. Views at 11-14.
Against this backdrop, two Commissioners made affirmative
determinations that subject imports had materially injured the domestic industry. They
found that the volume and increase in volume of Chinese and Vietnamese wind towers
were significant in absolute terms and relative to domestic consumption and production.
Views at 27-30. They further decided that these imports suppressed prices in the
domestic market, despite the absence of underselling and price depression on a total
delivered price basis. Views at 30-35. They thus determined that the subject imports’
high volumes and price effects had an adverse impact on the domestic industry over the
POI, and particularly during interim 2012. Views at 35-42. They concluded:
are any internal or external components which are not attached to the wind
towers or sections thereof.
Views at 5-6 (citing Utility Scale Wind Towers from the People’s Republic of
China, 77 Fed. Reg. 75,978 (Dep’t Commerce Dec. 26, 2012); 77 Fed. Reg.
75,985 (Dep’t Commerce Dec. 26, 2012); 77 Fed. Reg. 75,993-94 (Dep’t
Commerce Dec. 26, 2012)).
Court No. 13-00104 Page 7
The increasing volumes of subject imports resulted in reduced growth in
sales volumes and U.S. shipments and suppressed domestic price
increases despite a robust growth in demand at the end of the period. Their
effects have also included lower rates of capacity utilization, as well as
declining market share and financial losses. . . .
[Therefore,] we conclude that there is a causal nexus between the subject
imports and the poor performance of the domestic industry. Consequently,
we find that the domestic industry is materially injured by reason of subject
imports.
Views at 42.
A third Commissioner made an affirmative determination on the basis that
the subject imports posed an imminent threat of material injury to the domestic wind
tower industry. Weighing the statutory factors for finding threat, 19 U.S.C. § 1677(7)(F),
he found, inter alia, that the subject imports competed in all major regions of the United
States; Chinese and Vietnamese producers could accelerate production and delivery;
subject import prices were trending downward; China had inventories of undelivered
product; and subject import volume was significant and would likely increase
significantly. Pinkert Views at 3-8. He found that demand for wind towers would soon
moderate, such that “in the near future, it should take a much smaller volume of subject
imports to constitute a significant share of the market than it took” during the POI.
Pinkert Views at 6. He thus concluded that subject imports were likely to have an
adverse impact on the domestic industry in the imminent future. Pinkert Views at 7-8.
The two affirmative determinations based on material injury, combined with the third
affirmative determination based on threat of material injury, resulted in a final affirmative
injury determination.
Court No. 13-00104 Page 8
Plaintiffs now challenge this Final Determination on several grounds. (See
generally Siemens Energy, Inc.’s Rule 56.2 Motion for Judgment on the Agency Record
(“Siemens Mot.”); Memorandum of Law in Support of Plaintiffs’ Rule 56.2 Motion for
Judgment Upon the Agency Record (“Titan Mot.”).) First, Siemens argues that the court
should not defer to the Commission’s affirmative determination because the
determination did not arise from a majority vote for either material injury or threat of
material injury. (Siemens Mot. 14-18.) Second, Titan and Siemens contest the material
injury determination, alleging that the Commission improperly found that (1) the volume
of subject imports displaced a significant volume of domestic wind towers; (2)
competition from subject imports suppressed domestic wind tower prices; and (3)
subject imports adversely impacted the domestic industry. (See generally Siemens
Mot.; Titan Mot.) Third, they challenge Commissioner Pinkert’s threat of material injury
determination, alleging that he improperly found that the subject imports posed an
imminent threat of material injury to the domestic wind tower industry. (See generally
Siemens Mot.; Titan Mot.) The court has subject matter jurisdiction pursuant to 28
U.S.C. § 1581(c).
STANDARD OF REVIEW
An ITC determination is “presumed to be correct,” and the burden of
proving otherwise rests upon the challenging party. 28 U.S.C. § 2639(a)(1). The court
will uphold an agency determination that is supported by substantial evidence and
otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i).
Court No. 13-00104 Page 9
Substantial evidence is “‘such relevant evidence as a reasonable mind
might accept as adequate to support a conclusion.’” Huaiyin Foreign Trade Corp. (30)
v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v.
NLRB, 305 U.S. 197, 229 (1938)). It requires ‘“more than a mere scintilla,’” but “‘less
than the weight of the evidence.’” Nucor Corp. v. United States, 34 CIT __, __, 675 F.
Supp. 2d 1340, 1345 (2010) (quoting Altx, Inc. v. United States, 370 F.3d 1108, 1116
(Fed. Cir. 2004)). In determining whether substantial evidence supports the
Commission’s determination, the court must consider “the record as a whole, including
evidence that supports as well as evidence that ‘fairly detracts from the substantiality of
the evidence.’” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir.
2003) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)).
The Commission need not address every piece of evidence presented by the parties;
absent a showing to the contrary, the court presumes that the Commission has
considered all of the record evidence. Aluminum Extrusions Fair Trade Comm. v.
United States, 36 CIT __, __, 2012 WL 5201218, at *2 (2012) (citing USEC Inc. v.
United States, 34 F. App’x 725, 731 (Fed. Cir. 2002)).
That a plaintiff can point to evidence that detracts from the agency’s
conclusion or that there is a possibility of drawing two inconsistent conclusions from the
evidence does not preclude the agency’s finding from being supported by substantial
evidence. Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933, 936 (Fed.
Cir. 1984) (citing Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 619-20 (1966);
Armstrong Bros. Tool Co. v. United States, 626 F.2d 168, 170 n.4 (C.C.P.A. 1980)).
Court No. 13-00104 Page 10
Moreover, “when adequate evidence exists on both sides of an issue, assigning
evidentiary weight falls exclusively within the authority of the Commission.” Nippon
Steel Corp. v. United States, 458 F.3d 1345, 1358 (Fed. Cir. 2006). The court may not
“‘even as to matters not requiring expertise . . . 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.’” Mitsubishi Materials Corp. v. United
States, 20 CIT 328, 331, 918 F. Supp. 422, 425 (1996) (quoting Universal Camera
Corp. v. NLRB, 340 U.S. 474, 488 (1951) (ellipses in original)). Thus, the court “may
not reweigh the evidence or substitute its own judgment for that of the agency.” Usinor
v. United States, 28 CIT 1107, 1111, 342 F. Supp. 2d 1267, 1272 (2004) (citation
omitted).
Furthermore, when presented with a challenge to the Commission’s
methodology, the court examines “not what methodology [Plaintiff] would prefer,” but
“whether the methodology actually used by the Commission was reasonable.”
Shandong TTCA Biochem. Co. v. United States, 45 CIT at __, __, 774 F. Supp. 2d
1317, 1329 (2011) (quotation marks omitted). “As long as the agency’s methodology
and procedures are a reasonable means of effectuating the statutory purpose . . . the
court will not . . . question the agency’s methodology.” Int’l Imaging Materials, Inc. v.
United States, 30 CIT 1181, 1189 (2006) (quoting Ceramica Regiomontana, S.A. v.
United States, 10 CIT 399, 404-05, 636 F. Supp. 961, 966 (1986)) (first ellipses in
original).
Court No. 13-00104 Page 11
The two-step framework provided in Chevron, U.S.A., Inc. v. Natural Res.
Defense Council, Inc., 467 U.S. 837, 842-45 (1984), governs judicial review of the
Commission’s interpretation of the antidumping and countervailing duty statutes. Nucor
Corp. v. United States, 414 F.3d 1331, 1336 (Fed. Cir. 2005). First, the court must
determine ‘“whether Congress has directly spoken to the precise question at issue.’”
Heino v. Shinseki, 683 F.3d 1372, 1377 (Fed. Cir. 2012) (quoting Chevron, 467 U.S. at
842). If Congress’s intent is clear, “‘that is the end of the matter . . . .”’ Id. (quoting
Chevron, 467 U.S. at 842-43). However, “if the statute is silent or ambiguous,” the court
must determine whether the agency’s action “is based on a permissible construction of
the statute.” Dominion Res., Inc. v. United States, 681 F.3d 1313, 1317 (Fed. Cir. 2012)
(citing Chevron, 467 U.S. at 842-43).
DISCUSSION
I. The Tariff Act’s Tie-Vote Provision
a. Siemens’ Contentions
Siemens argues that the court should not defer to the Commission’s
affirmative determination because the determination did not arise from a majority vote
for either material injury or threat of material injury. (Siemens Mot. 14-16.) Siemens
points out that four of the six Commissioners found no material injury to the domestic
industry, while just two of the six Commissioners found present material injury.
(Siemens Mot. 16-17.) As to the “threat of material injury,” only one Commissioner
found threat, three found no threat, and the two who found material injury did not vote
with respect to threat. (Siemens Mot. 17.) Thus, Siemens argues, the Commission
reached an affirmative determination by aggregating the two material injury votes with
Court No. 13-00104 Page 12
the single threat of material injury vote, even though these determinations arise from
different criteria and analyses. (See Siemens Mot. 17-18.) Although Siemens
concedes that the Tariff Act requires aggregation of material injury and threat of material
injury votes to reach an affirmative determination, it opposes judicial deference to an
affirmative determination reached in this manner. (Siemens Mot. 14-15). Instead,
Siemens urges that the court should defer to the majority of Commissioners who made
negative determinations of material injury and threat of material injury. (Siemens Mot.
15-16.)
Siemens cites two cases for support. It contends that Wind Tower Trade
Coalition v. United States, a recent Federal Circuit decision related to this case, held
that “‘the ITC as a whole makes a finding’” of whether there is material injury. (Siemens
Reply 7.) As a result, disregarding “‘two-thirds of the ITC’s votes’ flouts the purpose of
the statute.” (Siemens Reply 7.) Siemens also relies on Nippon Steel Corp. v. United
States in which the court stated, “‘when the totality of the evidence does not illuminate a
black-and-white answer to a disputed issue, it is the role of the expert fact-finder – here
the majority of the Presidentially-appointed, Senate-approved Commissioners – to
decide which side’s evidence to believe.’” (Siemens Reply 6.) Siemens argues these
cases indicate that the court should defer to the majority of Commissioners, here, the
four Commissioners who found no material injury, rather than the views of the two
Commissioners reflected on the views of the Commission.
Court No. 13-00104 Page 13
b. Analysis
The Tariff Act considers the Commission’s voting pattern relevant in two
scenarios. First, it is relevant under the section of the Act that explains how to
aggregate votes when the Commission is evenly-divided. This section of the Act states:
If the Commissioners voting on a determination by the Commission . . .
are evenly divided as to whether the determination should be affirmative
or negative, the Commission shall be deemed to have made an affirmative
determination. For the purpose of applying this paragraph when the issue
before the Commission is to determine whether there is—
(A) material injury to an industry in the United States,
(B) threat of material injury to such an industry, or
(C) material retardation of the establishment of an industry in the
United States,
by reason of imports of the merchandise, an affirmative vote on any of the
issues shall be treated as a vote that the determination should be
affirmative.
19 U.S.C. § 1677(11). This section clearly provides that any affirmative vote for
material injury, threat of material injury, or material retardation of the domestic industry
“shall be treated as a vote that the determination should be affirmative” when the
Commissioners are evenly divided as to whether a determination is affirmative or
negative. See id. Thus, an affirmative determination need not arise from three
affirmative votes on the same basis, as long as there are at least three affirmative votes
on any of the three bases. See id.In the case of a divided vote by the Commission, as occurred here, this
statutory provision is important. The provision defines an evenly divided vote as an
affirmative determination for purposes of determining whether an antidumping or
Court No. 13-00104 Page 14
countervailing duty order will be put in place. Moreover, it makes it clear that the
Commission shall be deemed to have made that affirmative determination. The
standard of review to be applied by this court, as established by Congress, is whether
the determination of the Commission is “unsupported by substantial evidence on the
record, or otherwise not in accordance with law…” 19 U.S.C. § 1516a(b)(1)(B)(i). By
making the standard of review applicable to court review of the determination of the
Commission (see 19 U.S.C. §§ 1516a(a)(2)(A)(i)(II), 1516a(a)(2)(B)(i)), and defining a
tie vote as affirmative and as the determination of the Commission (see 19 U.S.C. §
1677(11)), Congress made plain that the same standard of review is applicable to the
Commission determination even when it is based on a split, tie vote.
The Commission’s voting pattern also is relevant to the sections of the
Tariff Act that deal with the effective date of Commerce’s antidumping and/or
countervailing duty orders when the Commission has reached an affirmative
determination. See 19 U.S.C. §§ 1671e(a), 1673e(a) (providing parallel rules for
countervailing and antidumping duties, respectively); see also Wind Tower Trade Coal.
v. United States, 741 F.3d 89, 96-97 (Fed. Cir. 2014). According to these sections, the
effective date of these orders may be retrospective, from the date the entries were
suspended (the “General Rule”), or prospective, from the date of publication of the final
Commission determination (the “Special Rule”). These Rules provide:
(1) General rule
If the [Commission], in its final determination ... finds material injury
or threat of material injury which, but for the suspension of
liquidation ... would have led to a finding of material injury, then
entries of the [subject merchandise], the liquidation of which has
Court No. 13-00104 Page 15
been suspended ..., shall be subject to the imposition of ... duties....
(2) Special rule
If the [ITC], in its final determination ... finds threat of material injury,
other than threat of material injury described in paragraph (1), ...
then [subject merchandise] which is entered, or withdrawn from
warehouse, for consumption on or after the date of publication of
notice of an affirmative determination of the [ITC] ... shall be subject
to the [assessment or imposition] of ... duties ..., and [Customs]
shall release any bond or other security, and refund any cash
deposit made.
Id. §§ 1671e(b), 1673e(b). “In other words, the General Rule applies if the ITC makes
(1) an affirmative finding of present material injury, or (2) a finding of a threat of material
injury that would have been a finding of present material injury [“but for”] provisional
measures.” Wind Tower, 741 F.3d at 97. The General Rule mandates that antidumping
and countervailing duties be collected retrospectively on merchandise that entered the
United States during the investigation. Id. In contrast, the Special Rule applies when
the ITC finds a threat of material injury that would not be present material injury “but for”
the application of provisional measures. Id. Under the Special Rule, antidumping or
countervailing duties are collected prospectively, from the date the ITC publishes its
final determination, and any provisional cash deposits are refunded. Id.
In arguing that the court should not defer to an affirmative determination
arising from a divided vote, Siemens conflates the Tariff Act provision dealing with tied
votes with the sections dealing with the effective date of duties. The tied-vote provision
explicitly requires aggregation of material injury and threat of material injury decisions to
reach an affirmative determination without regard to the “but for” findings in sections
1671e(b)(1) and 1673e(b)(1). See, e.g., Metallverken Nederland B.V. v. United States,
Court No. 13-00104 Page 16
13 CIT 1013, 728 F. Supp. 730 (1989). In contrast, the Tariff Act provision dealing with
the effective date of antidumping and countervailing duties emphasizes the importance
of the “but for” finding when the Commission makes a threat determination, but does not
explain how to treat a divided voting pattern. See Wind Tower, 741 F.3d at 96-97; see
also MBL (USA) Corp. v. United States, 16 CIT 108, 113-14, 787 F. Supp. 202, 207-08
(1992).
The cases that Siemens cites are inapposite as to whether the court
should decline to defer to a divided affirmative vote or otherwise apply some different,
less deferential, standard of review. The Wind Towers case deals with the vagary of
how to treat a divided voting pattern when applying the General Rule or the Special
Rule for collecting duties. See 741 F.3d at 97. It does not address the issue of
deference to a divided affirmative vote. See generally id. Siemens also misstates the
significance of the Nippon Steel quote that “when the totality of the evidence does not
illuminate a black-and-white answer to a disputed issue, it is the role of . . . the majority
of the . . . Commissioners – to decide which side’s evidence to believe.” 458 F.3d at
1359. Nippon does not concern the question of divided affirmative determinations, and
so the court’s emphasis on the majority of Commissioners lacks the significance with
which Siemens would imbue it.
The court sees no basis in the statute, precedent, or logic to apply a
different standard of review to affirmative determinations based on a divided vote than it
would apply to an affirmative determination in which a majority of the Commissioners
reached a common conclusion about the nature of the injury. The language of 19
Court No. 13-00104 Page 17
U.S.C. § 1677(11) provides no basis for treating an affirmative determination by a
divided Commission any differently than any other Commission determination.
Similarly, the standard of review provided in 19 U.S.C. § 1516a(b)(1)(B)(i) does not
suggest any distinction when reviewing a determination by a divided Commission.
Indeed, cases reviewing a determination by a divided Commission have applied the
same “substantial evidence” standard of review as used in cases with more uniform
voting patterns. See, e.g., Metallverken, 13 CIT 1013, 728 F. Supp. 730; cf. Corus
Staal Bv v. United States, 27 CIT 459, 2003 WL 1475045 (2003).
This approach makes sense given the absence of a manageable
alternative standard of review. Substantial evidence review acknowledges that
substantial evidence may exist to support different conclusions. See Matsushita, 750
F.2d at 936 (citing Consolo, 383 U.S. at 619-20; Armstrong Bros., 626 F.2d at 170 n.4);
see also Metallverken, 13 CIT at 1017, 728 F. Supp. at 734 (“It is well settled that
substantial evidence may exist in a record to support several inconsistent
conclusions.”). Substantial evidence review is not a vote counting exercise. See, e.g.,
Philip Bros., Inc. v. United States, 10 CIT 485, 486, 640 F. Supp. 1340, 1342 (1986)
(finding that the “size of the Commission majority is . . . irrelevant” when reviewing the
determination and that the court “may consider only whether the determination of the
Commission is unsupported by substantial evidence”). Even when four Commissioners
are persuaded by certain evidence, it does not mean that a contrary vote by the other
two Commissioners cannot be supported by substantial evidence or that such
substantial evidence must be reviewed with less deference by this court. Treating
Court No. 13-00104 Page 18
affirmative determinations by a divided Commission differently from uniform
determinations would ask the reviewing court to engage in impermissible reweighing of
the evidence in such cases. See Usinor, 28 CIT at 1111, 342 F. Supp. 2d at 1272; see
also Metallverken, 13 CIT at 1017, 728 F. Supp. at 734. In Metallverken, which
presented the same voting pattern as the underlying determination, the court rejected
plaintiff’s argument to negate an affirmative determination based solely on the findings
of the dissenting commissioners. The court reasoned as follows:
In asking the Court to negate a commissioner’s determination based upon the
findings of dissenting commissioners, plaintiffs are, in essence, asking the Court
to reweigh the evidence. The function of this Court is not to reweigh the
evidence, but rather to ascertain whether the Commissioner’s determination is
“unsupported by substantial evidence on the record or otherwise not in
accordance with law.”
Metallverken, 13 CIT at 1017, 728 F. Supp. at 734 (citations omitted). Thus, contrary to
Siemens’ arguments, the court reviews the Commission’s determination, no matter how
reached, based upon the substantial evidence standard.
II. The Material Injury Determination
Plaintiffs contest the Commission’s material injury determination, alleging
that the Commission improperly found that (1) the volume of subject imports displaced a
significant volume of domestic wind towers; (2) competition from subject imports
suppressed domestic wind tower prices; and (3) subject imports adversely impacted the
domestic industry. (See generally Siemens Mot.; Titan Mot.)
Pursuant to the Tariff Act, as amended, the Commission determines
whether a domestic industry is materially injured, or threatened with material injury, by
reason of unfairly subsidized or dumped imports. See 19 U.S.C. §§ 1671d(b),
Court No. 13-00104 Page 19
1673d(b). The Commission will issue an affirmative determination if it finds “present
material injury or a threat thereof” and makes a “finding of causation.” Hynix
Semiconductor, Inc. v. United States, 30 CIT 1208, 1210, 431 F. Supp. 2d 1302, 1306
(2006) (quotation marks omitted). In making a material injury determination, the
Commission evaluates “(1) the volume of subject imports; (2) the price effects of subject
imports on domestic like products; and (3) the impact of subject imports on the domestic
producers of domestic like products.” Id. (citing 19 U.S.C. §§ 1677(7)(B)(i)(I)-(III));
accord GEO Specialty Chems., Inc. v. United States, Slip Op. 09-13, 2009 WL 424468,
at *2 (CIT Feb. 19, 2009). The Commission may also consider “‘such other economic
factors as are relevant in the determination.’” Hynix Semiconductor, 30 CIT at 1210,
431 F. Supp. 2d at 1306 (quoting 19 U.S.C § 1677(7)(B)(ii)).
a. Volume
In performing its volume analysis, the ITC must 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.’”
Shandong TTCA Biochem., 45 CIT at __, 774 F. Supp. 2d at 1322 (quoting 19 U.S.C.
§ 1677(7)(C)(i)).
In its Views, the Commission assessed several metrics and determined
that the volume and the increase in volume of subject imports were significant, both in
absolute terms and relative to consumption. Views at 27. Specifically, the Commission
found that the volume of subject imports, by quantity, grew significantly between 2009
and 2011, and that “[t]he growth in subject imports in interim 2012 relative to interim
Court No. 13-00104 Page 20
2011 was dramatic.” Views at 27 (citing Staff Report at Table IV-2). 8 The Commission
also observed that, although subject imports’ U.S. market share fell slightly between
2009 and 2010, it increased significantly in 2011. Views at 28 (citing Staff Report at
Table IV-6). Likewise, subject imports’ share of the U.S. market, by quantity, rose from
interim 2011 to interim 2012. Views at 28 (citing Staff Report at Table IV-6). The ratio
of subject imports to U.S. production similarly increased substantially both from 2009 to
2011 and from interim 2011 to interim 2012, despite an increase in U.S. production.
Views at 28 (citing Staff Report at Table IV-7).
The Commission also considered domestic industry volume trends. It
found that the domestic industry’s volume decreased, despite an increase in demand in
interim 2012 prompted by the anticipated expiration of the investment tax credit and the
production tax credit (“PTC”). Views at 19-20 (citing Staff Report at II-11), 28-29. 9 To
benefit from the PTC, the wind turbine had to be operational by the end of 2012. Views
at 19-20 (citing Staff Report at II-11). Thus, OEMs rushed to install wind towers to
benefit from the PTC, leading to a substantial increase in apparent U.S. consumption of
wind towers between interim 2011 and interim 2012. Views at 28 (citing Staff Report at
Table IV-6). Although the Commission acknowledged that the domestic industry’s
market share rose somewhat between 2009 and 2011, it found that it was “far lower . . .
8 Subject imports grew by 41.8 percent between 2009 and 2011 and increased from 456
towers to 1,257 towers from interim 2011 to interim 2012. Views at 27 (citing Staff
Report at Table IV-2).
9 The PTC provided a 2.2 cents per kilowatt-hour credit for the first ten years of a wind
turbine’s operation. Views at 20 (citing Staff Report at II-10 to II-11).
Court No. 13-00104 Page 21
than at any prior point during the period of investigation” by interim 2012, dropping by
more than [[ ]] points from interim 2011 to interim 2012. Views at 28 (citing Staff Report
at Table IV-6). The Commission found that subject imports disproportionately benefited
from the surge in demand, with their shipments increasing “even more sharply” than the
rise in apparent U.S. consumption. Views at 28 (citing Staff Report at Table C-1).
The Commission considered several alternative explanations for why
domestic market share declined while subject import market share dramatically
increased during the POI. It considered, for example, that subject imports took market
share from nonsubject imports. Views at 28-29. It found, however, that “[t]he increase
in subject imports’ share of the U.S. market . . . came primarily at the direct expense of
the domestic industry rather than nonsubject imports,” noting that nonsubject imports’
market share declined from 2009 to 2011, and even by a small amount during interim
2012 when demand was peaking. Views at 28-29 (citing Staff Report at Table IV-6).
The Commission also rejected the possibility that the domestic industry’s inability to
supply the market accounted for the high levels of subject imports, observing that the
domestic industry had excess capacity that would have allowed it to fill a greater share
of demand than it did. Views at 29 (citing Staff Report at III-18, Tables III-3, III-5, III-6,
IV-2, Figs. E-1 to E-4). It concluded,
[w]hile factors such as operational inefficiencies and the expected non-
renewal of the PTC and other federal incentives may have played some role
in the domestic industry’s modest growth in production and shipments
during interim 2012, the record indicates that the subject imports also
played a role in precluding the domestic industry from increasing production
to take advantage of the increase in apparent consumption.
Views at 30 (citing Staff Report at III-18 n.33, VI-11; Hr’g Tr. (Cole) 81, 122-123).
Court No. 13-00104 Page 22
The Commission thus determined that the volume and increase in volume
of subject imports was significant during the POI. Views at 30.
i. Tax Credit Argument
Titan argues that the anticipated expiration of the PTC and investment tax
credit at the end of 2012 led to an anomalous surge in demand that domestic producers
were unable to accommodate. (Titan Mot. 5, 24-25, 36.) Relying on the dissenting
Commissioners’ rationale, Titan contends that, “‘[d]uring the latter half of the POI,
subject imports filled demand that was itself inflated and accelerated by the likely
expiration of the PTC and other federal incentives, but subject imports did not displace
significant amounts of domestic production or sales.’” (Titan Mot. 25.) As a result, Titan
urges that the Commission lacked substantial evidence to support its determination of a
significant volume and increase in volume of subject imports during the POI.
However, the Commission acknowledged that the surge in demand at the
end of the POI was particularly strong because of the anticipated non-renewal of the
PTC. Views at 28. Citing substantial record evidence, it found that significant volumes
of subject imports prevented the domestic industry from taking full advantage of this
surge. Views at 28. It cited, for example, the increase in quantity of subject imports,
Views at 27 (citing Staff Report at Table IV-2), and their growing market share during
the POI, Views at 28 (citing Staff Report at Tables IV-6, C-1). The Commission also
relied on record evidence that showed subject imports’ market share increased “more
sharply” than demand between interim 2011 and interim 2012 while the domestic
industry’s market share fell to its lowest point during that timeframe. Views at 28 (citing
Court No. 13-00104 Page 23
Staff Report at Table IV-6, C-1). The Commission considered and dismissed the
possibility that subject import market share grew at the expense of nonsubject imports,
finding that nonsubject imports lost a small amount of market share when subject
imports were increasing dramatically. Views at 28-29 (citing Staff Report at Table IV-6).
These findings provide substantial evidence to support the conclusion of
significant volumes and increase in volumes of subject imports during the POI, both in
absolute terms and relative to consumption. Relying on the dissenting Commissioners’
findings, Titan argues that the Commission determination is unsupported by substantial
evidence. That Titan can point to evidence that detracts from the Commission’s
conclusion, however, does not preclude the Commission’s finding from being supported
by substantial evidence. Matsushita, 750 F.2d at 936. In fact, in light of the dissent of
three Commissioners, the court is hardly surprised that the record contains contrary
evidence. Conflicting evidence, however, is insufficient for Titan to carry the day. Id.While the court must consider the record as a whole, when the Commission has based
its determination on substantial evidence and considered the evidence that fairly
detracts from its conclusion, the court may not displace the agency’s choice. Mitsubishi,
918 F. Supp. at 425. Titan’s arguments improperly ask the court to reweigh the record
evidence and, therefore, must be rejected. Usinor, 28 CIT at 1111, 342 F. Supp. 2d at
1272.
ii. Excess Capacity
Titan and Siemens challenge the Commission finding that the domestic
industry had excess capacity during the POI as unsupported by substantial evidence.
Court No. 13-00104 Page 24
(See Siemens Mot. 44-55; Titan Mot. 25-36.) They argue that the domestic industry
was unable to meet the spike in demand for wind towers, leaving purchasers with no
choice but to purchase subject imports. (See Siemens Mot. 44-55; Titan Mot. 25-36.)
In support of this argument, Titan and Siemens cite record evidence that calls into
question the domestic industry’s reported capacity. (See Siemens Mot. 44-55; Titan
Mot. 25-36.) For example, they point to record evidence that one company backed out
of orders, (Siemens Mot. 51-53), and that another company turned away orders from
domestic plants in 2010 and 2011 (Siemens Mot. 47-48). Plaintiffs also note that a third
company reported excess capacity though it told OEMs it could not accommodate
certain projects, (Siemens Mot. 55), and had not yet constructed a facility for which it
reported capacity (Titan Mot. 28-29). Similarly, Plaintiffs observe that a company
claimed capacity for a plant that lacked the staff to produce towers (Siemens Mot. 53-
54; Titan Mot. 29). Based on these examples of delayed and declined orders, Plaintiffs
argue that OEMs were forced to pay premiums for subject imports because the
domestic industry lacked actual capacity. (See Siemens Mot. 44-55; Titan Mot. 25-36.)
Notwithstanding these claims, the Commission cited substantial record
evidence corroborating domestic producers’ reported excess capacity. It reasonably
relied on the domestic producers’ certified capacity data. See Views at 4, 29-30. This
data provided substantial evidence for the Commission’s conclusion that the domestic
industry had excess capacity during the POI.
Further, the Commission reasonably addressed evidence that detracted
from the data upon which it relied. It acknowledged that domestic producers were not
Court No. 13-00104 Page 25
able to meet all of the growing demand, but found that OEMs elected to purchase wind
towers overseas despite available capacity among domestic producers. Views at 29
(citing Staff Report at Tables III-3, III-5, III-6, Figs. E-1 to E-4). For example, the
Commission observed that several qualified facilities operated at modest rates of
capacity utilization during interim 2012, Views at 30 n.169 (citing Staff Report at Table
III-5), and that one company built a facility that its expected customer declined to use,
Views at 30 n.170 (citing Staff Report at II-4 n.6, V-67). Additionally, the Commission
found that domestic producers had no choice but to decline certain orders because of
the contractual obligations they had undertaken through long-term supply agreements
that they believed required them to reserve certain production capacity for particular
OEM customers. See Views at 30 n.173 (citing e.g., Hr’g Tr. (Cole) 81, 122-123).
When the OEMs later renegotiated these agreements, domestic producers were left
with unused excess capacity. See id. 10 In addition, the Commission noted that some
domestic producers submitted bids for large projects for which subject imports were
used, undermining Plaintiffs’ allegations that these producers lacked capacity. Views at
41 n.234 (citing Staff Report at II-4 n.6). The Commission further determined that
concerns about the preparedness of certain domestic production were unfounded given
the two-year delivery horizon, the large number of towers involved, and the OEMs’
10 For example, one large producer, [[ ]], could not operate at capacity because it
had a long-term supply agreement with [[ ]] that [[ ]] later renegotiated in favor of
purchasing more subject imports. Views at 30 n.173 (citing e.g., Hr’g Tr. (Cole) 81, 122-
123). Meanwhile, [[ ]] lowered its prices per tower by over [[ ]] percent under this long-
term agreement. OEMs similarly renegotiated contracts with [[
]]. Views at 30 n.171 (citing Staff Report at III-18 n.33, V-11).
Court No. 13-00104 Page 26
decisions to qualify new facilities after production begins. Views at 30 n.170. Finally,
the Commission addressed and rejected the argument that domestic producers’
facilities were too far from the wind tower sites, noting several examples in which OEMs
relied on subject imports despite nearby domestic facilities with reported excess
capacity. 11 Views at 29-30 (citing Staff Report at Tables V-1, V-2, V-5, III-5).
Thus, the Commission relied on substantial record evidence to conclude
that the domestic industry had excess capacity due to the significant volume and
increasing volume of subject imports. Plaintiffs have not identified any error with the
Commission’s analysis. As discussed with respect to the standard of review applied by
this court, even if Plaintiffs may point to evidence relied on by the dissenters and
inconsistent with the Commission’s conclusion, that does not preclude the
Commission’s finding from being supported by substantial evidence. Matsushita, 750
F.2d at 936; Armstrong Bros., 626 F.2d at 170 n.4. The court “may not reweigh the
11 [[ ]], for example, relied on subject imports for a Midwest project even though
Trinity had facilities with capacity in Iowa and Texas. Views at 29 (citing Staff Report at
Tables V-2, III-5). [[ ]] also opted to supply its Shephard’s Flats project entirely with
subject imports, even though [[ ]] had a nearby facility and Broadwind offered to
build a new facility to supply the project. Views at 30 (citing Staff Report at II-4 n.6, V-
67). Plaintiffs’ claims that the [[ ]] is
also without merit. (See Siemens Mot. 54; Titan Mot. 29.) While Plaintiffs accurately
note that the record indicates that there were only [[
]] (Titan Mot. 29 (citing Staff Report at III-29 n.53)), the record also indicates that
[[
]] (See Staff Report at III-29 n.53.) Consequently, there was
substantial evidence to support the Commission’s finding that this plant had excess
production capacity.
Court No. 13-00104 Page 27
evidence or substitute its own judgment for that of the agency.” Usinor, 28 CIT at 1111,
342 F. Supp. 2d at 1272.
b. Price Effects
When performing a price effects analysis, the ITC must consider (1)
whether there has been significant price underselling by the imported merchandise as
compared with the price of the domestic like product and (2) whether the effect of
subject imports otherwise depresses prices to a significant degree or suppresses prices
to a significant degree. 19 U.S.C. § 1677(7)(C)(ii).
The Commission evaluated the existence of underselling, price
depression, and price suppression. It found that subject imports and the domestic like
product are generally substitutable, and compete for sales to OEMs. Views at 31 (citing
Staff Report at II-19, II-31 to II-32). It also noted that most OEMs ranked total cost, of
which f.o.b. prices are the largest component, as the most important factor in
purchasing decisions. Views at 31 (citing Staff Report at Tables V-1, V-5). Further, the
Commission observed that OEM pricing data indicated that subject imports generally
had lower f.o.b. prices than domestic towers, but that domestic towers were less
expensive on a delivered basis. Views at 32 (citing Staff Report at Table V-1; Hr’g Tr.
(Dougan) 156-157). Thus, the Commission found that subject imports were not
significantly underselling domestic products on a delivered basis. Views at 32-33. The
Commission likewise found that the subject imports did not have price depressing
effects on the domestic industry, concluding that unit value was an unreliable metric for
Court No. 13-00104 Page 28
evaluating price depression in this case because the size of wind towers increased as
sale values increased over the period of investigation. Views at 33.
However, the Commission found substantial record evidence of price
suppression because the domestic industry’s ratio of cost of goods sold to net merchant
market sales (“COGS ratio”) increased significantly during the POI. Views at 34 (citing
Staff Report at Table VI-1). 12 The Commission observed that the rising COGS ratio
coincided with the increasing volume of subject imports during 2011 and interim 2012.
Views at 34-35. It found this trend to be discordant with the price increases it would
have expected given the inelastic nature of the wind tower market and the spiking
demand during the period. Views at 35.
The Commission attributed the domestic industry’s unexpected cost-price
squeeze to evidence that OEMs negotiated based on f.o.b. prices. Views at 33-34
(citing Pet’r’s Post-Hr’g Br., Ex. 2; Hr’g Tr. (Cole) 31-32; Hr’g Tr. (Smith) 37). It
reasoned,
There have also been instances where the OEMs have pressured the
domestic producers to renegotiate their supply agreements to set lower
prices or alter volumes in light of the availability of low-priced subject
imports. The small number of OEMs in the market, the importance to
them of price in purchasing decisions, their pattern of negotiating prices
with domestic producers, and the availability of alternative sources of
supply in the market (the most prominent of which during the latter portion
of the period of investigation was subject imports), placed pressure on
domestic producers to discipline their prices in order to receive bid
solicitations or orders.
12The domestic industry’s COGS ratio increased from [[ ]] percent in 2009 to [[ ]]
percent in 2010 to [[ ]] percent in 2011. Views at 34 (citing Staff Report at Table VI-
1). In interim 2011, this ratio was [[ ]] percent, and in 2012 it was [[ ]]. Id.Court No. 13-00104 Page 29
Views at 34 (citing Staff Report at II-23, III-11, III-12, VI-17 n.28). Thus, the
Commission concluded that subject imports prevented the domestic industry from
raising prices during the POI, resulting in significant adverse price effects on the
industry. Views at 35.
i. Price Suppression
Siemens challenges the Commission’s determination of adverse price
effects as unsupported by substantial evidence because the Commission found no
evidence of significant price underselling, price depressing effects by subject imports, or
confirmed lost sales. (Siemens Mot. 43-44.) It further argues that the Commission’s
price suppression determination is inconsistent with the finding that subject imports cost
more on a delivered basis. (Siemens Mot. 44.)
However, the Commission did not need to find underselling, price
depression, or lost sales 13 to determine that the subject imports adversely affected the
domestic industry by suppressing prices. Cemex, S.A. v. United States, 16 CIT 251,
260-61, 790 F. Supp. 290, 299 (1992) (“To require findings of underselling would be
inconsistent with the proposition that price suppression or depression is sufficient.”),
aff’d, 989 F.2d 1202 (Fed. Cir. 1993). Likewise, higher priced subject imports are not
inconsistent with price suppression. Maine Potato Council v. United States, 9 CIT 293,
301-02, 613 F. Supp. 1237, 1245 (1985) (holding that higher quality imports may have
13The Commission acknowledged the absence of confirmed lost sales, but pointed out
that it viewed the [[ ]] as a sales opportunity that was lost during the
demand boom in interim 2012. Views at 33 n.190, 41 (citing Staff Report at II-4 n.6).
Court No. 13-00104 Page 30
price suppressing effects notwithstanding their higher price); Allegheny Ludlum Corp. v.
United States, 24 CIT 858, 880-81, 116 F. Supp. 2d 1276, 1298-99 (2000) (postulating
that higher, though declining prices for subject imports could have depressed prices).
Indeed, the Commission explained that, in this case, subject imports suppressed prices
because OEMs negotiated with domestic producers to lower their f.o.b. prices, which
were higher than those of subject imports. Views at 34 (citing Pet’r’s Post-Hr’g Br., Ex.
2; Hr’g Tr. (Cole) 31-32; Hr’g Tr. (Smith) 37).
The Commission reasonably found that subject imports suppressed
domestic prices and Plaintiffs have not demonstrated any error in the Commission’s
assessment of the facts. The Commission’s determination regarding the subject
imports’ price suppressing effects on the domestic industry is supported by substantial
evidence. Thus, the court may not reweigh the record evidence or otherwise second-
guess the Commission’s reasonable explanation. See Usinor, 28 CIT at 1111, 342 F.
Supp. 2d at 1272.
ii. COGS Ratio
Titan challenges the Commission’s methodology for finding price
suppression. It argues that the Commission failed to show a causal link between the
subject imports and the domestic industry’s rising COGS ratio. (Titan Mot. 42-43.)
Specifically, Titan contends that the COGS ratio cannot reliably show that subject
imports suppressed domestic prices because the COGS ratio does not correlate with
Court No. 13-00104 Page 31
the domestic industry’s net sales on a year-to-year basis. (Titan Mot. 42.) 14 Titan
asserts that the lack of year-to-year correlation between subject import market share,
domestic industry market share, and the COGS ratio disrupts the causal link between
subject imports and any price suppressing effects the domestic industry may have
experienced. (Titan Mot. 42.) Titan postulates that operational inefficiencies prevented
the domestic industry from raising prices during this period rather than subject imports.
(See Titan Mot. 46; see also Siemens Mot. 35-37, 58.)
However, the Commission reasonably relied on the rising COGS ratio as
evidence of price suppression. See, e.g., Nippon Steel, 458 F.3d at 1354 n.4 (“When
cost of goods sold (‘COGS’) exceeds price, the producer is unable to sell the product for
more than what it costs to produce the product; if the producer is unable to raise prices,
the industry finds itself in what is referred to as a cost-price squeeze.”); Chlorinated
Isocyanurates from China and Spain, Inv. Nos. 731-TA-1082-1083 (Final), USITC Pub.
3782 (June 2005) at 30 (finding that rises in unit COGS and in ratio of COGS to net
sales indicates cost-price squeeze). Indeed, the Commission articulated a sufficient
causal link between the subject imports and the domestic industry’s rising COGS ratio.
It focused on the trend of volume increases and elevated COGS ratios in 2011 and
interim 2012, not across the entire POI. Views at 35-36. The Commission observed
14For example, Titan notes that between 2009 and 2010, subject import market share
decreased while domestic COGS increased by [[ ]] points. (Titan Mot. 42 (citing Staff
Report at Tables C-1 and C-2).) And, between 2009 and 2011, domestic market share
increased while COGS increased. (Titan Mot. 42 (citing Staff Report at Tables C-1 and
C-2).) Further, during interim 2011 and interim 2012, domestic market share decreased
while COGS decreased. (Titan Mot. 42 (citing Staff Report at Tables C-1 and C-2).)
Court No. 13-00104 Page 32
that the COGS ratio increased from 2009 to 2011, remaining very high in interim 2012.
Views at 34 (citing Staff Report at Table VI-1). The Commission found that the high
COGS ratio in 2011 and interim 2012 coincided with dramatic increases in subject
import volumes. Views at 34-35 (citing Staff Report at Table VI-1). There is no support
for Titan’s argument that there must be a perfect correlation between subject imports
and COGS on a yearly basis. The Commission may reasonably rely on the trend of
volume increases and elevated COGS ratios as it did here.
Furthermore, the Commission reasoned that the domestic industry should
have been able to raise prices during 2011 and interim 2012 given the spike in demand,
but found it could not because of competition with subject imports. Views at 34-35
(citing Staff Report at Table V-2). The Commission acknowledged that operational
inefficiencies contributed to the domestic industry’s inability to raise costs, but
concluded that these issues did not account for the entirety of the cost-price squeeze.
Views at 34-35. 15 Rather, the Commission found that market conditions, such as the
small number of OEMs, the importance of price in purchasing decisions, negotiations
based on f.o.b. pricing, and the availability of subject imports, “placed pressure on
domestic producers to discipline their prices in order to receive bid solicitations or
orders.” Views at 34. It determined that the changes in the COGS ratio reflected this
price suppressive effect. Views at 34-35.
15 Moreover, the Commission found that at least some of these inefficiencies resulted
from OEM customers pressuring domestic producers to change production designs to
accommodate their shift to subject imports for designs previously supplied by the
domestic producer Views at 34 n.195 (citing Staff Report at VI-17 n.28).
Court No. 13-00104 Page 33
The Commission examined the relevant data and articulated a reasonable
explanation. To that end, the Commission established a sufficient causal link between
the subject imports and the domestic industry’s rising COGS ratio. Motor Vehicle Mfrs.
Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983); see also Uruguay
Round Agreements Act, Statement of Administrative Action, H.R. Rep. No. 103–316, at
156 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4184–85 (“SAA”) (stating that the
Commission “need not isolate the injury caused by other factors from injury caused by
unfair imports ... [r]ather, the Commission must examine other factors to ensure that it is
not attributing injury from other sources to the subject imports”). Plaintiffs’ ability to
point to evidence that detracts from the Commission’s findings, evidence that was
examined and discounted by the Commission, does not provide a justification for this
court to reweigh the evidence that was before the Commission. Usinor, 28 CIT at 1111,
342 F. Supp. 2d at 1272 (2004); see also Matsushita, 750 F.2d at 936.
iii. F.O.B. and Delivered Costs Argument
Plaintiffs next argue that the Commission lacked substantial evidence to
support its determination that OEMs negotiated with domestic producers based on f.o.b.
prices, thereby preventing price increases. (Siemens Mot. 43; Titan Mot. 38-41.) They
argue that delivered costs were more important to OEMs than f.o.b prices, and that
domestic wind towers were less expensive on that basis. (Titan Mot. 41.) Titan further
observed that domestic producers could not have known about the f.o.b. prices quoted
by their subject import competitors because OEM price negotiations were closed. (Titan
Mot. 40-41.) Titan urges that the fact that OEMs attempted to reduce prices through
Court No. 13-00104 Page 34
negotiations does not constitute the requisite causal link between subject imports and
domestic prices. (Titan Mot. 41.) Moreover, Siemens argues that the Commission
based its assessment of OEM negotiation patterns entirely on a misreading of a single
email. (Siemens Mot. 43.)
Contrary to Plaintiffs’ contentions, the Commission relied on substantial
evidence to determine that subject imports’ lower f.o.b. prices gave OEMs leverage in
negotiating with domestic producers, thereby suppressing domestic prices. The
Commission acknowledged that subject imports were more expensive on a delivered
basis, Views at 32-33 (citing Staff Report at V-1, V-2, V-6), but cited record evidence
that f.o.b. price was the biggest component of total cost and that OEMs negotiated
based on those prices. Views at 33-34 (citing Pet’r’s Post-Hr’g Br., Ex. 2; Hr’g Tr. (Cole)
31-32; Hr’g Tr. (Smith) 37). These negotiations pressured domestic producers to lower
prices to compete with subject imports. Id. Though bids were closed, the Commission
cited hearing testimony that OEMs leveraged quotes from other producers to drive f.o.b.
prices down. Id. Further, the Commission found that OEMs pressured domestic
producers to renegotiate supply agreements to set lower prices or alter volumes based
on lower priced subject imports. Views at 34 (citing Staff Report at II-23, III-11, III-12). 16
16 For example, the Commission found that [[
]]
Views at 34 n.195 (citing Staff Report at V-17 n.28). It also found that [[ ]] awarded
bids to subject import producers over [[ ]] even though these
Court No. 13-00104 Page 35
Thus, the Commission examined the relevant data and articulated a reasonable
explanation for its determination that was supported by substantial evidence. See
Motor Vehicle Mfrs., 463 U.S. at 43.
c. Adverse Impact
In examining the impact of subject imports, the Commission “shall
evaluate all relevant economic factors which have a bearing on the state of the
industry,” including output, sales, inventories, ability to raise capital, research and
development, and factors affecting domestic prices. 19 U.S.C. § 1677(7)(C)(iii). No
single factor is dispositive, and all are considered “within the context of the business
cycle and conditions of competition that are distinctive to the affected industry.” Id.The Commission found that subject imports adversely affected the
domestic industry during the POI based on these factors and considerations. Views at
36. It determined that “the domestic industry was unable to benefit from the sharp
increase in apparent U.S. consumption before the PTC was expected to expire” and
“experienced a decline in market share and only a modest increase in production and
U.S. shipments” as a result of significant volumes of subject imports during the POI, and
especially in interim 2012. Views at 36. The Commission further observed that the
domestic industry was unable to raise prices because of the presence of subject imports
and pressure by OEMs to lower f.o.b. prices to better compete with subject imports.
domestic producers could have had new plants ready to produce towers within the two-
year delivery timeframe. See Views at 30, 30 n.170 (citing Staff Report at II-4 n.6, V-
67).
Court No. 13-00104 Page 36
Views at 36. As a result, the domestic industry was unable to cover increased costs,
causing steep declines in operating income and resources available for capital
expenditures. Views at 36. The Commission evaluated whether other factors – non-
subject imports, operational inefficiencies, and the geographic location of projects – may
have harmed the industry during the POI, but found that these other factors accounted
for only a part of the adverse impact the domestic industry experienced. See Views at
40-41. The Commission concluded that the “record contains ample evidence that the
presence of the subject imports led to reduced production levels, shipments, capacity
utilization and price increases for the domestic industry as the OEMs turned to subject
imports rather than rely upon the domestic producers who had nearby unused capacity.”
Views at 42.
i. Excess Capacity
Plaintiffs challenge the Commission’s adverse impact finding on the basis
that the industry did not have excess capacity and actually gained market share
throughout the POI. (See Siemens Mot. 44-55; Titan Mot. 25-36.) In particular,
Plaintiffs argue that data showing excess capacity did not reflect actual market
conditions, noting that OEMs paid a premium for subject imports and that U.S.
producers refused and canceled orders throughout the period. (See Siemens Mot. 44-
55; Titan Mot. 25-36.)
As discussed previously in reviewing the Commission’s volume and price
effects analysis, Plaintiffs’ arguments that the domestic industry lacked excess capacity
cannot withstand the standard of review. The Commission relied on substantial record
Court No. 13-00104 Page 37
evidence from the domestic industry’s certified questionnaire responses to support its
finding of excess capacity. Views at 40 (citing Staff Report at Tables III-5, III-6). It also
had substantial evidence to support its determination that subject imports suppressed
domestic industry prices because OEMs used subject imports’ lower f.o.b. prices as
leverage in negotiations with domestic producers. Views at 33-34, 36 (citing Pet’r’s
Post-Hr’g Br., Ex. 2; Hr’g Tr. (Cole) 31-32; Hr’g Tr. (Smith) 37). The Commission cited
record evidence that domestic producers refused and canceled orders because of long-
term supply agreements with OEMs that tied up their production. These domestic
producers were then left with excess capacity when the OEMs subsequently
renegotiated downward the quantity of wind towers they would purchase from the
domestic producers and increased their purchases of subject imports. See Views at 30
n.171, n.173 (citing Hr’g Tr. (Cole) 81, 122-123; Staff Report at III-18 n.3, V-11). The
Commission thus had substantial evidence to support its Views. Plaintiffs have not
identified any error in the Commission’s analysis and, instead, simply disagree with the
outcome of that analysis. The court may not reweigh the evidence, as Plaintiffs
request. Usinor, 28 CIT at 1111, 342 F. Supp. 2d at 1272.
ii. Market Share
Plaintiffs argue that the Commission lacked substantial evidence to
support its determination that the domestic industry’s market share declined as a result
of increased subject imports. Titan argues that subject imports could not have
adversely affected the domestic industry given that domestic producers gained market
share throughout the POI. (Titan Mot. 46.) Siemens urges that the Commission should
Court No. 13-00104 Page 38
have viewed any loss in market share in the context of overall expansion of demand
that saturated domestic production capacity, such that “any further growth necessarily
meant a decline in domestic market share with no implications for the domestic
industry’s prosperity.” (Siemens Mot. 41-42.)
The Commission acknowledged that domestic market share grew
throughout most of the POI, but found that the domestic industry lost market share
during interim 2012, when demand was spiking. Views at 37-38. As previously
discussed, the Commission also found that the domestic industry had excess capacity
during this period, indicating that growth in market share did not have to go to subject
imports, as Siemens contends. Views at 40. The Commission reasonably found that
the domestic industry’s market share declined as a result of increased subject imports.
Because the Commission’s determination is supported by substantial evidence, the
court may not reweigh the record evidence by second-guessing the Commission’s
reasonable explanation. See Usinor, 28 CIT at 1111, 342 F. Supp. 2d at 1272.
iii. Non-Subject Imports
Siemens also challenges the Commission’s finding of adverse impact by
revisiting the contention that the Commission insufficiently analyzed the role of non-
subject imports in domestic market trends. (Siemens Mot. 59.)
As addressed earlier, the Commission considered the role of non-subject
imports and found that they did not have an adverse impact on the domestic market
during the POI. The Commission determined that “nonsubject imports lost market share
throughout the period of investigation” and “[a]t the same time that subject imports were
Court No. 13-00104 Page 39
generally increasing, nonsubject imports’ share of the market was declining.” Views at
23, 28 (citing Staff Report at Tables IV-2, IV-6; Tr (Revak) 226). Based on this record
evidence, the Commission concluded that non-subject imports could not have caused
the adverse impact that the domestic industry experienced during the POI. The
Commission instead decided that the “increase in subject imports in interim 2012
relative to interim 2011 came almost entirely at the expense of the domestic industry,
while nonsubject imports remained a minor factor in the growing U.S. market.” Views at
40 (citing Staff Report at Table C-2). Because the Commission relied on substantial
record evidence to support its conclusion about the role of non-subject imports, the
court may not reweigh the record evidence. Usinor, 28 CIT at 1111, 342 F. Supp. 2d at
1272.
III. The Threat of Material Injury Determination
In determining whether a domestic industry is threatened with material
injury by reason of subject imports, the Tariff Act requires the ITC to consider, “among
other relevant economic factors,” (i) the nature of any countervailable subsidy; (ii) any
existing unused production capacity or imminent, substantial increase in production
capacity in the exporting country, taking into account the availability of other export
markets to absorb any additional exports; (iii) a significant rate of increase of the
volume or market penetration of the subject merchandise; (iv) the likely price effects of
the subject imports; (v) inventories of the subject imports; (vi) the potential for product-
shifting in facilities currently being used to produce other products; (vii) if the
investigation involves raw agricultural products, any product processed from such
Court No. 13-00104 Page 40
products; (viii) the actual and potential negative effects on the existing development and
production efforts of the domestic industry; and (ix) any other adverse trends that
indicate that material injury by reason of subject imports is likely. 19 U.S.C.
§ 1677(7)(F)(i). Though the presence or absence of any factor is not decisive, “a
determination may not be made on the basis of mere conjecture or supposition.” See
19 U.S.C. § 1677(7)(F)(ii). 17
In his Views, Commissioner Pinkert weighed the relevant statutory factors
and determined that wind tower imports from China and Vietnam posed a threat of
material injury to the domestic industry. See generally Pinkert Views. Focusing on
market conditions at the end of the POI, he found that the domestic industry was
vulnerable to material injury in the imminent future because foreign producers had, inter
alia, significantly increased volumes and market share; significantly and rapidly
expanded their presence throughout the U.S. market, even in regions where they did
not traditionally compete; generated substantial excess capacity that could quickly be
directed at the U.S. market; and accumulated significant inventories. Pinkert Views at
3-6. Commissioner Pinkert further observed that the price differential between the
17 19 U.S.C. § 1677(7)(F)(ii) states:
The Commission shall consider the factors set forth in clause (i) as a whole
in making a determination of whether further dumped or subsidized imports
are imminent and whether material injury by reason of imports would occur
unless an order is issued or a suspension agreement is accepted under this
subtitle. The presence or absence of any factor which the Commission is
required to consider under clause (i) shall not necessarily give decisive
guidance with respect to the determination. Such a determination may not
be made on the basis of mere conjecture or supposition.
Court No. 13-00104 Page 41
domestic product and subject imports narrowed during this timeframe and that demand
for wind towers in the foreseeable future was expected to moderate from the 2012 high.
Pinkert Views at 6-7. In this context, he determined that subject import volumes will
likely be significant in the imminent future, leading to increased price competition with
the domestic industry. Pinkert Views at 7-8. He concluded:
Limited sales opportunities in a less than robust market will intensify price
competition between subject imports and domestic producers, and even a
modest volume of subject imports would be likely to result in negative
effects on the domestic industry. As a consequence, in the absence of
trade relief, the industry is likely in the imminent future to suffer a
significant loss of revenues that will cause a further deterioration in its
financial condition, as well as declining employment, output, and
productivity.
Pinkert Views at 8.
Plaintiffs challenge Commissioner Pinkert’s determination, arguing that he
lacked substantial evidence to support a finding that injury to the domestic market was
“imminent”; improperly extrapolated conditions from interim 2012 in finding imminent
threat; and lacked substantial evidence to support the statutory factors that he found
indicated an imminent threat of material injury to the domestic market. (See generally
Siemens Mot.; Titan Mot.) Thus, they argue that his findings, as a whole, rest on
speculation and conjecture. (See generally Siemens Mot.; Titan Mot.)
a. “Imminent” Material Injury
In his Views, Commissioner Pinkert found that the termination of the PTC
and the investment tax credit in 2012, and their one-year renewal for 2013, would cause
demand to moderate in the near future. He reasoned:
Court No. 13-00104 Page 42
[I]t should take a much smaller volume of subject imports to constitute a
significant share of the market than it took during the period of heightened
demand in 2011 and 2012 leading up to the then-expected end of the PTC
and [investment tax credit]. Given moderate demand, subject producers
are likely to compete intensely for U.S. sales in order to better utilize their
available capacity. Consequently, for the above reasons, I find that, in the
absence of trade relief, imports of the subject merchandise in the
imminent future are likely to be significant and to increase significantly,
both in absolute terms and relative to consumption, over the low-to-
nonexistent levels to which they fell as a result of expectations that the
PTC and [investment tax credit] would not be renewed.
Pinkert Views at 6 (citing Staff Report at II-10, Table VII-9). He further indicated that
such increased volumes of subject imports were imminent because “it would likely take
six to nine months for purchasers to respond to the renewal of the PTC with new
orders.” Pinkert Views at 6-7 n.27 (citing Hr’g Tr. (Smith) 80).
Siemens urges that the harm Commissioner Pinkert predicted could not
occur imminently because a year or more would pass between planning projects in
response to the renewed tax credits and delivery of towers. (Siemens Mot. 25-26.) It
argues that this timeframe is at odds with the dictionary definition of “imminent” as
meaning “about to happen.” (Siemens Mot. 25-26 (citing Oxford Concise Dictionary (2d
ed. 1989).)
Commissioner Pinkert’s determination was supported by substantial
evidence and in accordance with law. A six to nine month timeframe is sufficiently
imminent to support a threat determination. Although “[n]o bright-line test exists to
determine when injury is imminent”, this court has found timeframes longer than “six to
nine months” to be “imminent.” Asociacion de Productores de Salmon y Trucha de
Chile A.G. v. USITC, 26 CIT 29, 39, 180 F. Supp. 2d 1360, 1371 (2002) (rejecting
Court No. 13-00104 Page 43
arguments that imminent “cannot mean within one to two years”); accord Goss Graphics
System, Inc. v. United States, 22 CIT 983, 1007-08, 33 F. Supp. 2d 1082, 1103-04
(1998) (upholding as reasonable finding that harm was imminent where it would
manifest in two or more years); see also Co-Steel Raritan, Inc. v. USITC, 29 CIT 562,
570-71 (2005). Further Commissioner Pinkert cited hearing testimony to support his
finding that competition with subject imports would increase within a “six to nine month”
timeframe. Pinkert Views at 6-7 n.27 (citing Hr’g Tr. (Smith) at 80). That Plaintiffs can
point to record evidence that supports a different timeframe is of no moment. See
Matsushita, 750 F.2d at 936.
b. Tax Credit Renewal
Plaintiffs also argue that Commissioner Pinkert improperly speculated that
significant subject import volumes during interim 2012 represented a trend, urging that
2012 was actually a unique year during which domestic producers could not satisfy
demand. (Siemens Mot. 27-29, 34-35; Titan Mot. 48-49.) Plaintiffs contend that the
looming expiration of the PTC and investment tax credit drove 2012’s spike in demand,
(Siemens Mot. 27-29, 34-35; Titan Mot. 48-49), and that Commissioner Pinkert
wrongfully assumed that the renewal of these tax credits would lead to continued high
demand. (Siemens Mot. 17-18, 27-29, 34-35; Titan Mot. 48-49.) They assert that the
renewal could not produce the same level of demand as existed in interim 2012
because the tax credits’ terms changed for 2013. (Siemens Mot. 17-18, 27-29, 34-35;
Titan Mot. 48-49.) In contrast to the 2012 tax credits, the 2013 tax credits required that
projects be commenced, not that orders be placed, by the end of the year to qualify.
Court No. 13-00104 Page 44
(Siemens Mot. 17-18, 27-29, 34-35; Titan Mot. 48-49.) Therefore, Plaintiffs assert that
projects commenced in 2013 “[m]ight never be finished, depending upon the economic
circumstances and prospects for grid parity.” (Siemens Mot. 29.) Plaintiffs thus
contend that Commissioner Pinkert’s determination about demand trends in the
imminent future was inherently speculative and conjectural. (See Siemens Mot. 29.)
Commissioner Pinkert used an accepted methodology and relied on
substantial evidence to support his determination that the renewal of the tax credits
would spur further demand. The court has repeatedly upheld reliance on trends as
constituting substantial evidence in support of a threat of material injury determination.
See Asociacion de Productores, 26 CIT at 38, 180 F. Supp. 2d at 1370 (holding that
trend data showing imminent increase in import volumes constituted substantial
evidence to support Commission’s threat finding); see also Bando Chem. Indus., Ltd. v.
United States, 17 CIT 798, 807 (1993), aff’d, 26 F.3d 139 (Fed. Cir. 1994) (finding that
the Commission reasonably inferred from trend data that increased foreign production
was likely destined for U.S. market). Commissioner Pinkert thus reasonably relied on
substantial record evidence of trends showing, inter alia, increased volumes, market
share, and excess capacity among foreign producers as evidence of a threat of
imminent material injury to the domestic industry.
c. Factors for Finding Threat of Material Injury
Finally, Plaintiffs challenge Commissioner Pinkert’s weighing of the
statutory factors for examining whether there is a threat of material injury. (Siemens
Mot. 39-42; Titan Mot. 48-52.) They argue that no substantial evidence supports
Court No. 13-00104 Page 45
Commissioner Pinkert’s findings that (i) the surge in subject import volume would
continue after interim 2012; (ii) subject imports had an expanding presence in the U.S.
market; (iii) foreign producers had excess capacity; (iv) foreign producers had significant
end-of-year inventories poised for the U.S. market; and (v) subject imports would have
future price effects on the domestic industry.
i. Volume After Interim 2012
With respect to Plaintiffs’ argument that the interim 2012 surge in volume
was an anomaly, as discussed previously, Commissioner Pinkert reasonably relied on
the trend in subject import volumes at the end of the POI in assessing whether a threat
of material injury existed to the domestic market. See Asociacion de Productores, 26
CIT at 38, 180 F. Supp. 2d at 1370; Bando Chem., 17 CIT at 807. In particular,
Commissioner Pinkert identified substantial evidence to support his determination that
subject import volumes were trending upward. 18 He noted that most of this surge
occurred late in the period of investigation and came at the expense of the domestic
industry. Pinkert Views at 3-4 (citing Staff Report at Table C-1). He also addressed the
absence of future orders, explaining that record data was compiled before the renewal
of the tax credits and that purchasers would have been reluctant to place orders until
after that situation had been clarified. Pinkert Views at 6-7 n.27 (citing Hr’g Tr. (Smith)
80). He reasoned that, with the renewal of the PTC and investment tax credit for
18Commissioner Pinkert observed that shipments of subject imports were [[ ]]
percent higher in interim 2012 than in interim 2011. Pinkert Views at 3-4 (citing Staff
Report at Table C-1).
Court No. 13-00104 Page 46
construction projects beginning in 2013, “purchasers are necessarily compelled to act
quickly to place orders, likely resulting in intense competition for the reduced volume of
sales and likely negatively impacting domestic producers in the imminent time frame.”
Pinkert’s Views at 6-7 n.27 (citing Hr’g Tr. (Smith) 80).
While Plaintiffs have a point that the situation in 2013 will differ from that in
2012 with the changes in the two tax credits, Commissioner Pinkert had to make a
determination on the basis of the record that was before him. While discussing the
future is inherently uncertain, Commissioner Pinkert tied his findings with regard to the
future to the facts of record as they existed at the time he was making his determination.
On that basis, Commissioner Pinkert relied on substantial record evidence in finding
that subject import volumes would remain high in the imminent future.
ii. Expanding Presence
In weighing the statutory factors for threat of material injury, Commissioner
Pinkert reasoned,
There is no reason to believe that the subject exporters, having expanded
their presence in the U.S. market so significantly, beginning in 2011 and
accelerating in 2012, including in the central region of the country where
they might be expected not to be fully competitive due to transportation
costs and logistical difficulties, would, in the absence of trade relief,
relinquish it by not competing in the imminent future to their fullest abilities
in all regions of the U.S. market.
Pinkert Views at 4. Plaintiffs contend that Commissioner Pinkert lacked substantial
evidence to support this conclusion. (Siemens Mot. 38; Titan Mot. 49.) They argue that
OEMs had no choice but to rely on subject imports because domestic producers
routinely defaulted and rejected orders. (Siemens Mot. 38; Titan Mot. 49.) With less
Court No. 13-00104 Page 47
demand after interim 2012, they urge, OEMs are likely to return to their preferred
practice of sourcing from domestic producers. (Titan Mot. 49.)
Contrary to Plaintiffs’ contentions, Commissioner Pinkert reasonably found
substantial record evidence that subject imports had an expanding presence in the U.S.
market. He noted that purchases and installations of subject imports increased
significantly at the end of the POI, even in regions where Plaintiffs argue subject imports
do not compete with domestic wind towers. Pinkert Views at 4 (citing Siemens Post-
Hr’g Br. at 1, 8-10; Foreign Resp’ts Final Comments, at 11-12 & n.43; Staff Report at
Tables V-1, V-5). 19 Moreover, as previously discussed, Commissioner Pinkert identified
record evidence indicating that the domestic industry’s operational inefficiencies could
not account for the full surge in subject import volume at the end of the POI, and that
OEMs caused these inefficiencies in some cases by renegotiating contracts in favor of
purchasing more subject imports. Thus, Commissioner Pinkert based his finding of
expanding presence of subject imports at the end of the POI on substantial evidence.
iii.Excess Capacity
As part of his threat determination, Commissioner Pinkert found that “the
Chinese and Vietnamese industries have significant unused capacity for the production
of wind towers that they can use to export to the United States in the imminent future.”
19 For example, he found that subject imports sold in Midwestern states grew
substantially over prior years to [[ ]] units in all of 2011 and then surged to [[ ]]
units in the first six months of 2012. Similarly, he found that the number of subject
imports sales in the region consisting of Texas, Oklahoma, New Mexico, and Arizona
grew from [[ ]] units in all of 2010 to [[ ]] units during interim 2012. Pinkert Views
at 4 (citing Staff Report at Tables V-1, V-5).
Court No. 13-00104 Page 48
Pinkert Views at 5 (citing Staff Report at Table VII-6; Pet’r’s Post-Conf. Br. at Ex. 2). He
based this finding on data from foreign producers showing significantly increased
capacity between 2009 and 2012 and no projection that this capacity would fall in 2013.
Pinkert Views at 4-5 (citing Staff Report at Table VII-6).
Titan argues that Commissioner Pinkert lacked substantial evidence to
support this determination. (Titan Mot. 50.) It asserts that foreign producers reported
theoretical data on capacity when they were actually already operating at full capacity.
(Titan Mot. 50.) It further contends that foreign producers with capacity cannot ship in
the absence of orders, and that OEMs prefer to purchase from domestic producers.
(Titan Mot. 50.)
Commissioner Pinkert cited certified data from Chinese and Vietnamese
producers about their capacity to support his conclusion. See Pinkert Views at 4-5
(citing Staff Report at Table VII-6). This data constituted substantial evidence that
foreign producers had increased their capacity in recent years; that their capacity
utilization was falling across the period; and that, as a result, they had significant excess
capacity that they could use to export additional volumes of subject imports to the
United States. See Pinkert Views at 5 (citing Staff Report at Table VII-6). Although
Titan argues that the data relied upon was reported on a theoretical basis, it has failed
to support this contention with record evidence. In fact, Titan merely cites to the general
questionnaire responses of the foreign producers without any further support for its
theory that the data is theoretical. (Titan Mot. 50.) Thus, Titan has not established that
Court No. 13-00104 Page 49
Commissioner Pinkert’s findings on excess capacity were unreasonable or unsupported
by substantial evidence.
iv.End-of-Year Inventories
Commissioner Pinkert also found that foreign producers had significant
end-of-year inventories poised for the U.S. market. Plaintiffs argue that this conclusion
is not supported by substantial evidence. (Siemens Mot. 30, 34-36, 40; Titan Mot. 50-
51.) They explain that foreign producers inaccurately reported as “inventory” “made to
order” towers that had already been sold. (Siemens Mot. 30, 34-36, 40; Titan Mot. 50-
51.)
Commissioner Pinkert considered the made-to-order nature of wind
towers but also noted that they are not necessarily custom-made. Pinkert Views at 5-6
n.23 (citing Staff Report at Tables VII-2, VII-4, VII-8). Moreover, the record showed that
at least on one occasion, a foreign producer used subject towers in its inventory that
were made-to-order for one project for a different project. (See Staff Report at V-48.)
Thus, Commissioner Pinkert’s consideration of the subject producers’ end-of-period
inventories was reasonable and the existence of contradictory record evidence does not
indicate that Commissioner Pinkert’s determination was not supported by substantial
evidence. See Armstrong Bros., 626 F.2d at 170 n.4. Further, the statutory factors for
assessing threat of material injury must be considered “as a whole,” such that even if
there were a weakness in the analysis of any one factor, it does not impeach the overall
determination. See 19 U.S.C. § 1677(7)(F)(ii).
Court No. 13-00104 Page 50
v. Price Effects
Commissioner Pinkert found that the price gap between subject imports
and domestic products narrowed at the end of the POI and he anticipated that prices of
subject imports would continue to fall as demand moderated in 2013. Pinkert Views at
7 (citing Staff Report at Tables V-2, V-6). He reasoned that competition would intensify,
pushing down prices and adversely affecting an already vulnerable domestic industry.
Id.Plaintiffs assert that this finding is speculative because OEMs likely would
return to their preferred practice of purchasing from domestic producers to obtain their
base load requirements if demand moderated and domestic producers could meet such
demand. (Titan Mot. 52.) They also argue that Commissioner Pinkert’s finding of a
narrowing price gap lacks substantial evidentiary support because the record shows
that import prices were consistently higher than domestic prices on a delivered basis.
(Siemens Mot. 39; Titan Mot. 51.) Siemens further contends that Commissioner
Pinkert’s finding of future price suppression is contrary to law because the Tariff Act
requires that price suppression be found in the present. (Siemens Mot. 40 (citing 19
U.S.C. § 1677(7)(F)(iv) (“[Subject imports] are entering at prices that are likely to have a
significant depressing or suppressing effect on domestic prices, and are likely to
increase demand for further imports.”)
Commissioner Pinkert reasonably found evidence of future price effects.
He observed that the domestic industry’s operating income margin declined from 2009
to 2011 and [[ ]] in interim 2012, even as U.S. consumption of wind
Court No. 13-00104 Page 51
towers peaked. 20 Further, Commissioner Pinkert cited record evidence that the gap in
prices between subject imports and the domestic like product fell from 2009 to interim
2012. 21 He reasoned that, in the context of increased subject imports and moderate
demand growth, subject import producers would further lower prices, exerting additional
downward pressures on domestic prices. Pinkert Views at 8. Commissioner Pinkert
noted that several domestic producers had already shuttered plants or switched to other
products in interim 2012. Pinkert Views at 8 (citing Staff Report at III-1 to III-2).
Commissioner Pinkert thus concluded that subject imports were likely to
have negative price effects on the domestic industry. Contrary to Plaintiffs’ contentions,
Commissioner Pinkert reasonably extrapolated future price effects from these end-of-
POI trends. See, e.g., Goss, 22 CIT at 1002-03, 33 F. Supp. 2d at 1099-1100 (affirming
Commission determination that small number of sales likely to be awarded in imminent
future would “likely result in intense competition among domestic and foreign suppliers
for bid awards. Moreover, this intensified competition for a smaller pool of sales
opportunities increases the incentive for suppliers of [subject] imports to compete on the
basis of price.”). Because Commissioner Pinkert supported his trend findings with
substantial evidence, the court will not reweigh the evidence or substitute its judgment
for the Commissioner’s. Usinor, 28 CIT at 1111, 342 F. Supp. 2d at 1272.
20 Specifically, the domestic industry’s operating income margin fell from [[ ]] percent
in 2009, to only [[ ]] percent in 2011 and to [[ ]] in interim 2012.
Pinkert Views at 8 (citing Staff Report at Tables C-1, C-2).
21 In particular, Commissioner Pinkert found that the price gap shrunk from 28 percent in
2009-2011 to 11.2 percent in interim 2012. Pinkert Views at 7 (citing Staff Report at
Tables V-2, V-6).
Court No. 13-00104 Page 52
CONCLUSION
For the reasons provided above, the court denies Plaintiffs’ motions for
judgment on the agency record.
_/s/_Mark A. Barnett____
Mark A. Barnett
Judge
17
Dated: June ____, 2014
New York, New York