Hitachi Metals, Ltd. v. United States

Case: 19-1289 Document: 57 Page: 1 Filed: 02/07/2020
United States Court of Appeals
for the Federal Circuit
______________________
HITACHI METALS, LTD., HITACHI METALS
AMERICA LLC,
Plaintiffs-Appellants
DAIDO STEEL CO., LTD.,
Plaintiff
v.
UNITED STATES, ARCELORMITTAL USA LLC,
NUCOR CORPORATION,
Defendants-Appellees
______________________
2019-1289
______________________
Appeal from the United States Court of International
Trade in Nos. 1:17-cv-00140-MAB, 1:17-cv-00165-MAB,
Judge Mark A. Barnett.
______________________
Decided: February 7, 2020
______________________
DANIEL CANNISTRA, Crowell & Moring, LLP, Washing-
ton, DC, argued for plaintiffs-appellants. Also represented
by ROBERT L. LAFRANKIE, PIERCE LEE.
BRIAN RUSSELL SOISET, Office of General Counsel,
United States International Trade Commission, Washing-
ton, DC, argued for defendant-appellee United States. Also
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2 HITACHI METALS, LTD. v. UNITED STATES
represented by ANDREA C. CASSON, DOMINIC L. BIANCHI.
BROOKE MICHELLE RINGEL, Kelley Drye & Warren,
LLP, Washington, DC, argued for defendant-appellees
Arcelormittal USA LLC, Nucor Corporation. Defendant-
appellee Arcelormittal USA LLC also represented by
KATHLEEN CANNON, ROBERT ALAN LUBERDA, PAUL C.
ROSENTHAL.
ALAN H. PRICE, Wiley Rein, LLP, Washington, DC, for
defendant-appellee Nucor Corporation. Also represented
by STEPHANIE MANAKER BELL, CHRISTOPHER B. WELD.
______________________
Before MOORE, REYNA, and STOLL, Circuit Judges.
REYNA, Circuit Judge.
In 2017, the U.S. International Trade Commission is-
sued a final affirmative determination that a U.S. domestic
industry was materially injured by virtue of imported steel
goods sold at less than fair value. Hitachi appealed to the
United States Court of International Trade, challenging
the Commission’s “domestic like product” determination.
The Court of International Trade affirmed the Commis-
sion’s domestic like product determination. Hitachi ap-
peals that judgment. Because we conclude that the
Commission’s “domestic like product” determination is
supported by substantial evidence and otherwise not con-
trary to law, we affirm.
BACKGROUND
This case arises from an antidumping duty investiga-
tion on imports of carbon and alloy steel cut-to-length plate
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HITACHI METALS, LTD. v. UNITED STATES 3
(“CTL plate”). 1 On April 8, 2016, three domestic producers
of CTL plate (“petitioners”) filed petitions with the U.S. De-
partment of Commerce (“Commerce”) and the U.S. Inter-
national Trade Commission (“Commission”), alleging that
imports of CTL plate from twelve countries, including Ja-
pan, were sold in the United States at less than fair value,
and that an industry in the United States was materially
injured as a result. Carbon and Alloy Steel Cut-to-Length
Plate, 81 Fed. Reg. 22116 (April 14, 2016) (Institution De-
cision). Both the Commission and Commerce initiated an-
tidumping duty investigations. Id. Hitachi Metals, Ltd.,
and Hitachi Metals America, LLC (“Hitachi”) joined the
Commission investigation, identifying itself as “a Japanese
producer . . . and U.S. importer of carbon and alloy steel
cut-to-length plate.” Carbon and Alloy Steel Cut-to-Length
Plate, Inv. No. 701-560 USITC Pub. 590311 (Sept. 12,
2016).
I. “Domestic Like Product”
Commerce and the Commission play separate and dis-
tinct roles in the administration of antidumping duty in-
vestigations. 19 U.S.C. § 1673. Generally, Commerce
investigates whether certain imported articles are sold in
the United States at less than fair value, i.e., “dumped.”
Cleo Inc. v. United States, 501 F.3d 1291, 1294 (Fed. Cir.
2007). The Commission investigates whether a U.S. “do-
mestic industry” is materially injured or threatened with
material injury by reason of those imports. Id. at 1295.
Central to antidumping duty investigations, and cen-
tral to this appeal, are Commerce’s and the Commission’s
separate determinations as to the products relevant to
their respective inquiries. Commerce identifies the scope
1 The investigations involved both antidumping duty
and countervailing subsidies investigation. This appeal in-
volves only the antidumping duty investigation.
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4 HITACHI METALS, LTD. v. UNITED STATES
of imported articles subject to the investigation, referred to
as the “subject merchandise.” Pesquera Mares Australes
Ltda. v. United States, 266 F.3d 1372, 1374–75, 1375 n.2
(Fed. Cir. 2001); see 19 U.S.C. § 1677(25). The Commission,
on the other hand, determines the “domestic like product.”
The “domestic like product” is a U.S. product “which is like,
or . . . most similar in characteristics and uses” to the sub-
ject merchandise. Cleo Inc., 501 F.3d at 1295 (quoting 19
U.S.C. § 1677(10)). The Commission’s definition of which
domestic goods constitute “like products” determines the
relevant domestic industry and, in turn, the scope of the
Commission’s injury analysis. Id.
By statute, the Commission’s “domestic like product”
analysis begins with a review of the “articles subject to in-
vestigation,” i.e., the subject merchandise as determined by
Commerce. 19 U.S.C. § 1677(10) (defining “domestic like
product” as a “product which is like, or in the absence of
like, most similar in characteristics and uses with, the ar-
ticle subject to an investigation” (emphasis added)). The
Commission then conducts a six-factor inquiry that evalu-
ates whether the subject merchandise corresponds with a
single domestic like product or multiple domestic like prod-
ucts. Cleo, 501 F.3d at 1295. Specifically, the Commission
compares the imported articles and domestic products by
considering: (1) physical characteristics and uses; (2) chan-
nels of distribution; (3) interchangeability; (4) customer
and producer perceptions; (5) common manufacturing facil-
ities, production processes, and production employees; and
where appropriate (6) pricing. Id.; Timken Co. v. United
States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996). The
Commission may determine that the subject merchandise
identified by Commerce encompasses one or more domestic
like products. Cleo, 501 F.3d at 1295.
II. The Commission’s Investigation
In May 2016, the Commission published its prelimi-
nary determination which included a preliminary like
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HITACHI METALS, LTD. v. UNITED STATES 5
product determination. Carbon and Alloy Steel Cut-to-
Length Plate, 81 Fed. Reg. 33705–06 (May 27, 2016) (Pre-
liminary Determination); J.A. 121–136. The Commission
reviewed Commerce’s subject merchandise determination
and then performed the six-factor analysis based on the ev-
identiary record existing at that time. J.A. 121–133. The
Commission concluded that the U.S. domestic industry
consists of “a single domestic like product consisting of all
CTL plate coextensive with the scope of these investiga-
tions.” J.A. 130 (emphasis added). Specifically, the Com-
mission defined the domestic like product as:
Certain carbon and alloy steel hot-rolled or forged
flat plate products not in coils, whether or not
painted, varnished, or coated with plastics or other
non-metallic substances. Subject merchandise in-
cludes plate that is produced by being cut-to-length
from coils and plate that is rolled or forged into a
discrete length. The products covered include (1)
Universal mill plates (i.e., flat-rolled products
rolled on four faces or in a closed box pass, of a
width exceeding 150 mm but not exceeding 1250
mm, and of a thickness of not less than 4 mm,
which are not in coils and without patterns in re-
lief), and (2) hot-rolled or forged flat steel products
of a thickness of 4.75 mm or more and of a width
which exceeds 150 mm and measures at least twice
the thickness, and which are not in coils, whether
or not with patterns in relief. The covered products
described above may be rectangular, square, circu-
lar or other shapes and include products of either
rectangular or non-rectangular cross-section where
such non-rectangular cross-section is achieved sub-
sequent to the rolling process, i.e., products which
have been ‘‘worked after rolling,’’ (e.g., products
which have been beveled or rounded at the edges).
J.A. 122–23. The Commission also incorporated certain
limitations adopted in Commerce’s subject merchandise
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6 HITACHI METALS, LTD. v. UNITED STATES
determination, such as limitations related to width and
thickness, iron and carbon content, and third country pro-
cessing. Id. In addition, the Commission incorporated
Commerce’s seven express exclusions, which included:
“products clad, plated, or coated in metal,” “military grade
armor plate,” “stainless steel plate,” and “[a]lloy forged and
rolled CTL plate.” J.A. 123–127. None of the limitations
or exclusions related to tool steel.
After the preliminary determination, the Commission
issued questionnaires to relevant parties, including domes-
tic producers, importers, purchasers, and foreign producers
in the subject countries. See 19 CFR § 207.20(b). Before
issuing the questionnaires, the Commission circulated
drafts to the parties for comment. Id. Three importers,
including Hitachi, submitted comments, asking the Com-
mission to collect separate data for “tool steel” so that the
Commission could consider whether tool steel is a separate
domestic like product. The Commission granted the re-
quest and issued a supplemental questionnaire seeking
tool steel data from domestic producers. Four domestic
producers responded with information. The Commission
also contacted domestic producers who did not respond to
the questionnaire. The Commission also collected addi-
tional data via telephone and email from several of those
producers.
After receiving additional briefing and conducting the
public hearing, the Commission undertook another domes-
tic like product analysis in view of the full record. The
Commission “examined closely whether the record sup-
port[ed] finding a clear dividing line between tool steel and
high speed steel on the one hand, and other CTL plate prod-
ucts on the other.” J.A. 2118; see also J.A. 2111–2119. Af-
ter noting that the evidence was “mixed,” the Commission
found no clear dividing lines between tool steel and other
CTL plate products and concluded that defining tool steel
as a separate domestic like product was “not warranted.”
Id. As a result, the Commission reaffirmed its preliminary
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HITACHI METALS, LTD. v. UNITED STATES 7
determination of a single domestic like product coextensive
with Commerce’s subject merchandise determination. Id.
III. Court of International Trade
Hitachi appealed the Commission’s final determina-
tion to the Court of International Trade. 2 Hitachi argued
that the Commission’s like product determination was le-
gally erroneous and unsupported by substantial evidence.
The Court of International Trade rejected Hitachi’s argu-
ments and affirmed the Commission’s determination.
Hitachi timely appealed. We have jurisdiction under
28 U.S.C. § 1295(a)(5).
DISCUSSION
This court conducts de novo review of appeals from the
Court of International Trade that involve a Commission
like product determination. In doing so, we apply the same
standard of review applied by the Court of International
Trade: we ask whether the Commission’s like product de-
termination is “unsupported by substantial evidence on the
record, or otherwise not in accordance with law.” 19 U.S.C.
§§ 1516a(b)(1)(B)(i), 1516a(a)(2)(B)(i); Nippon Steel Corp.
v. United States, 458 F.3d 1345, 1350 (Fed. Cir. 2006).
Under the substantial evidence standard of review, “we
must affirm a Commission determination if it is reasonable
and supported by the record as a whole, even if some evi-
dence detracts from the Commission’s conclusion.” Altx,
Inc. v. United States, 370 F.3d 1108, 1121 (Fed. Cir. 2004)
(internal citations and quotations omitted). While a party
“may disagree with the conclusions drawn by the Commis-
sion and offer reasonable, alternate explanations . . . , it is
2 Daido Steel Co., Ltd. joined Hitachi in appealing
the Commission’s final determination to the Court of Inter-
national Trade. For purposes of this opinion, we refer to
both parties as “Hitachi.”
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8 HITACHI METALS, LTD. v. UNITED STATES
not the role of this court to refind the facts or interpose
[our] own determinations.” Id. at 1123–24 (internal quota-
tions omitted).
Hitachi raises essentially the same three arguments
that it raised to the Court of International Trade. Hitachi
contends that the Commission’s like product determination
was erroneous because: (i) the Commission unlawfully pre-
sumed that the domestic like product was coextensive with
Commerce’s subject merchandise determination; (ii) the
Commission’s inclusion of tool steel unlawfully ignored a
35-year established agency practice; and (iii) the Commis-
sion’s inclusion of tool steel was not supported by substan-
tial evidence. We address each argument in turn.
First, Hitachi contends that the Commission’s like
product analysis was legally erroneous because the Com-
mission “employed a presumption that the domestic like
product is coextensive with the scope” of investigation. Ap-
pellant Br. 21–24; Oral Arg. at 1:30–7:15. Hitachi explains
that Congress separately defined “domestic like product”
and “subject merchandise” in 19 U.S.C. § 1677, and that
the Commission failed to give those terms their separate
meanings. Appellant Br. 17–18. Hitachi further contends
that the Commission’s use of an “unlawful presumption” is
evidenced by its “arbitrary” inclusion of tool steel and ex-
clusion of “very similar” products like stainless steel. Ap-
pellant Br. at 24, 41 n.18. Hitachi asserts that the subject
merchandise is “irrelevant” to the Commission’s like prod-
uct determination. Appellant Br. 22 (“whether a product
falls in or out of the scope is irrelevant when determining
whether it constitute[s] a separate like product”). We dis-
agree.
Commerce’s subject merchandise determination is not
“irrelevant” to the Commission’s like product determina-
tion. Just the opposite: the subject merchandise determi-
nation is “necessarily the starting point of the
Commission’s like product analysis.” Cleo, 501 F.3d at
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HITACHI METALS, LTD. v. UNITED STATES 9
1298 n.1 (citing 19 U.S.C. § 1677(10)). The statute re-
quires the Commission to consider Commerce’s subject
merchandise determination in reaching its own like prod-
uct determination. To do otherwise risks creating two dis-
connected agency investigations.
Hitachi cites cases holding that the Commission’s like
product determination must be “separate and distinct”
from Commerce’s subject merchandise determination. Ap-
pellant Br. 19–20 (citing Hosiden Corp. v. Advanced Dis-
play Mfrs. Of Am., 85 F.3d 1561, 1567 (Fed. Cir. 1996);
Acciai Speciali Terni S.p.A. v. United States, 118 F. Supp.
2d 1298, 1304 (Ct. Int’l Trade 2000)). Those cases do not
support Hitachi’s arguments. There is no dispute that the
Commission’s like product determination must be separate
and distinct from Commerce’s subject merchandise deter-
mination. See Hosiden, 85 F.3d at 1568 (“Commerce’s des-
ignation of the class or kind of merchandise sold at [less
than fair value] does not control the Commission’s defini-
tion of the industry injured in its sales of like products.”).
Hitachi cites no authority that precludes the Commission
from determining that the domestic like product and the
subject merchandise are coextensive. See 19 U.S.C.
§ 1677(10) (defining domestic like product as the product
“most like . . . the article subject to investigation” (empha-
sis added)).
We are also unpersuaded by Hitachi’s argument that
the Commission was required to compare tool steel to prod-
ucts outside of Commerce’s subject merchandise determi-
nation. See Appellant Br. 24, 41 n.18. The statute does not
require such a broad analysis. 19 U.S.C. § 1677(10). To
the contrary, it instructs the Commission to confine its like
product determination to a comparison between domestic
products and “the article subject to an investigation.” See
id. Hitachi provides no authority to the contrary.
In Cleo, we rejected the argument that “the Commis-
sion allowed Commerce’s finding to shape its like product
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10 HITACHI METALS, LTD. v. UNITED STATES
determination.” 501 F.3d at 1298 n.1. We noted that the
Commission had expressly recognized the “settled rule that
Commerce’s [subject merchandise] finding does not control
the Commission’s [like product] determination.” Id. In the
present case, the Commission expressly articulated the
same rule:
Although the Commission must accept Commerce’s
determination as to the scope of the imported mer-
chandise that is subsidized or sold at less than fair
value, the Commission determines what domestic
product is like the imported articles Commerce has
identified. . . . Cleo, 501 F.3d at 1298 n.1 (“Com-
merce’s [scope] finding does not control the Com-
mission’s [like product] determination]”).
J.A. 2088–2089, 2089 n.12 (brackets in original). Here, as
in Cleo, “we do not perceive that the Commission’s like
product analysis was biased towards finding . . . a single
like product in order to conform its finding with the scope
of Commerce’s [determination].” See Cleo, 501 F.3d at 1298
n.1.
Second, Hitachi argues that the Commission’s like
product analysis was legally erroneous because it disre-
garded a 35-year “established practice” of “treating tool
steel as separate and distinct from all other steel.” Appel-
lant Br. 25–28. Hitachi explains that the Commission
failed to either “conform itself to its prior decisions or ex-
plain the reasons for departing from” its long-established
agency practice. Appellant Br. 30. We disagree.
The cases Hitachi cites involve proceedings brought
under different statutory provisions, different products,
and different periods of investigation. See J.A. 19–29. Hi-
tachi fails to cite a single antidumping investigation that
involved the same subject merchandise as this case and
where tool steel was excluded from the Commission’s defi-
nition of domestic like product. See id. As we have previ-
ously explained, each antidumping duty investigation “is
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HITACHI METALS, LTD. v. UNITED STATES 11
sui generis, involving a unique combination and interaction
of many economic variables.” Nucor Corp. v. United States,
414 F.3d 1331, 1340 (Fed. Cir. 2005). That the Commission
reached different outcomes in cases with different circum-
stances “do[es] not indicate that the Commission either
committed legal error in the methodology it used in this
case or departed from the mode of analysis it regularly em-
ploys.” Cleo, 501 F.3d at 1299.
Third, Hitachi argues that the Commission’s like prod-
uct analysis is not supported by substantial evidence. Hi-
tachi does not contest any specific aspect of the
Commission’s factual findings. Instead, Hitachi faults the
Commission for having “failed to fully collect” the infor-
mation relevant to its like product analysis, and that the
Commission “disregarded more than 90 percent of [the] rel-
evant industry.” Appellant Br. 44–45, 50. Hitachi argues
that the Commission’s failure to collect data led to an in-
firm record and renders the like product determination un-
supported by substantial evidence. We disagree.
The Commission satisfied its obligation to conduct “in-
vestigative activities” under 19 CFR § 207.20(b). In re-
sponse to the supplemental questionnaires it issued at
Hitachi’s request, the Commission received data from four
domestic tool steel producers. The Commission also sought
out non-responding manufacturers via telephone and
email, and successfully collected data from several of those
parties. Contrary to Hitachi’s argument that the Commis-
sion “disregarded” information from tool steel producers,
the record shows that several entities Hitachi named as
tool steel producers reported that they do not produce tool
steel. Based on the administrative record, we conclude
that the Commission’s like product investigation and evi-
dence collection was not unreasonable. As a result, the
Commission’s like product conclusions are supported by
“such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.” Consol. Edison Co.
of New York v. N.L.R.B., 305 U.S. 197, 229 (1938).
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12 HITACHI METALS, LTD. v. UNITED STATES
We have considered Hitachi’s other arguments and
find them unpersuasive.
CONCLUSION
Finding no error in the Commission’s like product de-
termination, we affirm the judgment of the Court of Inter-
national Trade.
AFFIRMED
COSTS
No costs.