U.S. Court of International Trade decisions during 2007 in appeals of determinations of the U.S. International Trade Commission.

Author:Dorn, Joseph W.

    The U.S. Court of International Trade ("CIT" or the "court") reviews determinations of the U.S. International Trade Commission (the "Commission" or "ITC") pursuant to 28 U.S.C. [section] 1581 (c). (1) In general, an "interested party" who appeared in a underlying antidumping or countervailing duty proceeding may appeal a determination of the Commission to the court. (2) The most commonly appealed cases arise out of negative preliminary injury determinations in original investigations, final injury determinations in original investigations, and sunset review determinations. (3)

    During 2007, the CIT issued nine written opinions involving appeals from the ITC. The court remanded two negative preliminary determinations in original investigations, affirmed a negative final determination on remand in an original investigation, affirmed two affirmative sunset review determinations, and remanded an affirmative sunset review determination. The court also issued written opinions granting an application for preliminary injunction to enjoin liquidation of entries pending appeal, denying another such application for injunctive relief pending appeal, and denying a motion to strike attachments to a reply brief filed with the court. The opinions having the greatest impact on how the ITC decides cases involved the application of the Bratsk (4) "replacement/benefit" test in an original investigation, (5) the interpretation of the "likely" standard in a sunset review, (6) and the application of the "clear and convincing evidence" standard in preliminary original investigations. (7) The other five CIT decisions from 2007 deserve careful attention as well and are discussed separately below. For the most part, these decisions did not involve major legal issues, and they broke little new ground.

    The CIT's decision in Mittal Steel Point Lisas Limited. v. United States, however, is an important case in a series of decisions relating to the application of a principle announced two years ago by the U.S. Court of Appeals for the Federal Circuit in Bratsk. Under this principle, a domestic industry is not to receive relief from unfair trade even if the evidence relating to the statutory injury factors would otherwise compel an affirmative determination if (1) the case involves a "commodity product," (2) imports from non-subject countries are a "significant factor" in the market, and (3) there is reason to believe that non-subject imports would have replaced the subject imports had those imports not been present in the market or would do so if antidumping/ countervailing duty orders against subject imports are imposed. The ITC has referred to this as the "replacement/benefit test" and has vehemently argued that it is contrary to law. Mittal Steel reflects perhaps the starkest manifestation of the ITC's opposition to Bratsk, and it is given special attention in the discussion below for that reason.

    In addition, the CIT reviewed two Commission decisions involving negative determinations in preliminary investigations. The court's opinions in these cases suggest that the "arbitrary and capricious" standard of review applicable in such appeals may not be an impossible burden for losing petitioners to overcome in such cases.


    Mittal Steel Point Lisas Ltd. v. United States (8) arose from a long-running appeal of an affirmative material injury determination by the Commission in an antidumping duty investigation of steel wire rod from the Republic of Trinidad and Tobago ("RTT"). (9) In an earlier segment of the proceeding, the CIT sustained the Commission's affirmative material injury determination. (10) The Federal Circuit later vacated that result and remanded to the Commission. (11)

    On remand, Commissioners Shara L. Aranoff and Jennifer A. Hillman found material injury and threat of material injury by reason of imports of subject merchandise from RTT. (12) Commissioners Stephen Koplan and Charlotte R. Lane also made an affirmative material injury determination, though they did not make a threat determination in their separate and dissenting views. (13) Taken together, this majority of the Commission found a significant volume of subject imports, negative price effects, and a significant adverse impact on the domestic industry. (14) In contrast, Commissioner Deanna Tanner Okun readopted her negative material injury and threat of material injury findings. (15) Commissioner Daniel L. Pearson did not participate in the remand determination. (16) Even though Commissioners Aranoff, Hillman, Lane, and Koplan all found material injury by reason of subject imports, the remand resulted in a negative determination because Commissioners Aranoff and Hillman complied with what they found to be a compulsory mandate by the court to apply the Bratsk "replacement/benefit" test, even in the context of assessing the threat of material injury. (17) This extra step of analysis led Commissioners Aranoff and Hillman to make a negative determination, even though they found that application of the statutory factors resulted in affirmative findings for both material injury and threat of material injury. (18) Commissioners Aranoff and Hillman felt compelled by the remand order to apply the "replacement/benefit" test in a threat context, though the Commission has never found Bratsk to require this test.

    The Federal Circuit's remand was largely based on a claim of legal error by foreign producers that the Commission "did not evaluate the effect of RTT's imports in light of other LTFV [less than fair value] imports, and its findings did not discuss the effect of fairly-traded imports." (19) On remand, the Federal Circuit mandated that the Commission

    make a specific causation determination and in that connection ... directly address whether [other LTFV imports and/or fairly traded imports] would have replaced [Trinidad and Tobago's] imports without any beneficial effect on domestic producers. (20) The "replacement/benefit" test is "triggered" in an antidumping duty investigation if (1) the subject merchandise is a commodity product and (2) price-competitive non-subject imports are a significant factor in the market. (21) Commissioners Aranoff and Hillman found that these "triggering factors" were present in this case. (22) Commissioners Koplan and Lane, however, dissented and found that subject and non-subject imports were not commodity products. (23) Because they concluded that "this threshold Bratsk triggering factor [was] not met," Commissioners Koplan and Lane did not perform the "replacement/benefit" test and maintained their affirmative material injury determination. (24) In contrast, Commissioners Aranoff and Hillman found the presence of a commodity product because they felt "constrained to interpret the Court's ruling broadly for purposes of satisfying the Court's remand in this case...." (25) Commissioners Aranoff and Hillman (26) noted that their negative remand result occurred

    solely as a consequence of our application of the additional "replacement/benefit" analysis set forth by the Federal Circuit in Caribbean Ispat and Bratsk. Had the Commission applied only what we believe to be the proper standard for "material injury by reason of subject imports," ... we would have arrived at an affirmative determination. (27) Senior Judge Aquilino also recounted that Commissioners Aranoff and Hillman raised other fundamental concerns with Bratsk: namely, that the decision creates a presumption in favor of finding that replacement of subject imports by non-subject imports will occur upon revocation of the Order at issue. (28) Specifically, Commissioners Aranoff and Hillman cautioned that the "replacement/benefit" test appears to require the agency to render a negative determination if the triggering factors are satisfied, unless the record contains substantial evidence that either non-subject imports would not replace the subject imports or that such replacement would nonetheless benefit the domestic industry. (29)

    Commissioners Aranoff and Hillman also suggested that "the data needed to rebut such a presumption" might be withheld by non-subject producers "from countries not under investigation ... with no incentive to provide the data needed." (30) As a result, they reasoned that this presumption may well prove unassailable and that the Bratsk analysis will require the Commission to make negative determinations where the record would (and perhaps should, in their view) otherwise lead to a contrary result. (31) This is exactly what happened in Mittal Steel, where the application of the "replacement/benefit" test by Commissioners Aranoff and Hillman was not predicated on any positive evidence. (32) Instead, Commissioners Aranoff and Hillman merely noted an "absen[ce]" or "lack" of data on the record to rebut the presumptions for both the "replacement" and "benefit" prongs. (33) The domestic industry, in contrast, argued that it is less than clear that the court's decision actually requires any such presumptions.

    The Commission's reversal on remand is also noteworthy because Commissioners Aranoff and Hillman stated that the Bratsk test is unclear and engenders

    ambiguities [that] arise because the requirement imposed by the Bratsk panel ... is not among the statutory factors Congress has required the Commission to consider. Indeed, such a test misconstrues the purpose of the statute, which is not to bar subject imports from the U.S. market or award subject import market share to U.S. producers, but is meant instead to "level[] competitive conditions" by imposing a duty on subject imports and thus enabling the industry to compete against fairly traded imports. The statutory scheme in fact contemplates that subject imports may remain in the U.S. market after an order is imposed...

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