The views in this paper are those of the authors. This paper is not a document of the U.S. International Trade Commission and is not intended to represent the official views or methods of the Commission or any individual Commissioner.
During 2005, the U.S. Court of International Trade ("CIT") and the U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") issued several decisions that addressed issues arising out of the antidumping and countervailing duty ("AD/CVD") determinations of the International Trade Commission ("Commission" or "ITC"). These decisions addressed such issues as the Commission's obligation to respond to arguments of the parties, its assessment of the likelihood of material injury in sunset reviews, its discretion to adopt reasonable analytical methodologies for its analyses, and its consideration of the probative weight of the record evidence in AD/CVD proceedings. In this article, we provide an overview and analysis of the CIT and Federal Circuit's 2005 decisions. By way of introduction, we will first briefly review the Commission's responsibilities in the AD/CVD area and the principles of appellate review that apply to the Commission's decisions.
THE COMMISSION'S RESPONSIBILITIES IN AD/CVD PROCEEDINGS AND APPELLATE REVIEW OF THE COMMISSION'S INJURY DETERMINATIONS
The Commission's Responsibilities under the AD/CVD Statute
The International Trade Commission is one of two federal agencies that are responsible for making the determinations necessary to impose an antidumping or countervailing duty order. In an AD/CVD investigation, the Department of Commerce ("Commerce") assesses whether a foreign producer has sold its products in the United States at less than fair value, that is, at "dumped" prices, and whether the producer's sales have been subsidized by a foreign government. (1) The Commission determines whether the domestic industry producing a like product is materially injured or threatened with material injury by reason of the dumped or subsidized imports. (2) If Commerce finds that the imports are dumped or subsidized and the Commission finds that the industry has been materially injured or threatened with injury by these imports, Commerce issues an AD or CVD duty order covering the imports in question. (3)
Once an order is issued, the Commission and Commerce must review it every five years to determine whether the order continues to be necessary to protect the industry against the injurious effects of dumped or subsidized imports. (4) In these "sunset reviews," Commerce assesses whether revocation of the AD or CVD order or termination of a suspended investigation would be likely to lead to continuation or recurrence of dumping or subsidization (5); the Commission then assesses whether revocation of the order or termination of a suspended investigation would be likely to lead to continuation or recurrence of material injury. (6) If Commerce concludes that dumping or subsidization is not likely to continue or recur, or the Commission concludes that injury is not likely to continue or recur, the order will be revoked. (7)
Judicial Review of the Commission's AD/CVD Determinations
Generally, an interested party (8) who appeared as a party in the Commission's investigation may appeal the Commission's determinations in AD/CVD proceedings to the Court of International Trade. (9) Such a plaintiff may appeal the Commission's negative preliminary injury determinations in AD/CVD investigations, its final injury determinations in AD/CVD investigations (whether negative or affirmative), and its sunset review determinations. (10) After the CIT issues its final decision in the appeal, the losing party may appeal to the Federal Circuit. (11)
When reviewing a Commission determination on appeal, the courts do not conduct a de novo review of the record evidence. Instead, the statute directs the courts to apply one of two standards of review on appeal. (12) If the appeal involves a negative preliminary injury determination, a determination not to initiate a changed circumstances review, or a determination in an expedited sunset review, the court must decide whether the determination is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." (13) For all other appeals involving AD/CVD determinations, the court must decide whether the Commission's determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." (14) Both of these standards require the courts to give deference to the Commission's factual analysis and ultimate conclusions on causation and injury. (15) When applying the "arbitrary and capricious" standard, the reviewing court "consider Is] whether the [Commission']s decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.... Although [the] inquiry into the facts is to be searching and careful, the ultimate standard of review is a narrow one. The Court is not empowered to substitute its judgment for that of the agency." (16)
Similarly, the substantial evidence standard is a deferential one. The Supreme Court has described "substantial evidence" as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion," (17) and "something less than the weight of the evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." (18) Accordingly, when applying this standard the reviewing 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." (19) In other words, a court may not "reweigh the evidence or substitute its own judgment for that of the agency." (20)
Finally, when plaintiffs argue that the Commission has improperly interpreted or applied a particular statutory provision, the court will decide whether the Commission determination at issue is "otherwise not in accordance with law." (21) Applying this standard, the court "determine[s] whether Congress's purpose and intent on the question at issue is judicially ascertainable." (22) The expressed intent of Congress is controlling when the statutory language is clear, in which case the court need not defer to the Commission's interpretation of the statute. (23) However, if the statute is silent or ambiguous, the court must defer to the Commission's interpretation of the statute, so long as it is reasonable. (24)
JUDICIAL DECISIONS INVOLVING THE COMMISSION INJURY DETERMINATIONS IN 2005
In 2005, the CIT and the Federal Circuit issued several decisions addressing the Commission's obligation to provide an adequate explanation of the basis for its injury findings, its use of reasonable analytical methodologies in its injury analysis, its discretion to determine the probative weight of the record evidence, and its likely injury analysis in sunset reviews.
Cases Addressing the Commission's Obligation to Provide An Adequate Explanation of the Basis for Its Injury Analysis
In 2005, the CIT and the Federal Circuit issued several decisions addressing the Commission's obligation to provide an adequate explanation of its analysis in its AD/CVD determinations. The courts addressed this obligation in two contexts. In one case, the Federal Circuit analyzed whether the Commission was required to explicitly address an argument made by the plaintiff during the underlying proceeding. In the remaining cases concerning this issue, the courts addressed the plaintiffs' contention that, even though the Commission addressed a particular issue in its determination, it nonetheless failed to apply the correct legal standard or to explain how the facts in the record supported its conclusions. In this second category of cases, plaintiffs asserted that the responsive arguments made by the Commission during litigation amounted to post hoc rationalization.
The Commission's Obligation to Address Parties' Arguments
In 2005, the Federal Circuit issued a precedential opinion in Timken U.S. Corp v. United States. (25) The issue before the appellate court concerned the Commission's obligation to respond to "relevant arguments" of the parties under 19 U.S.C. [section] 1677f(i)(3)(B). This statutory provision, which was added by the Uruguay Rounds Agreement Act ("URAA"), (26) requires the Commission to include in final determinations "an explanation of the basis for its determination that addresses relevant arguments that are made by interested parties who are parties to the investigation or review (as the case may be) concerning volume, price effects, and impact on the industry of imports of the subject merchandise." (27) This requirement applies to determinations made in original investigations as well as those made in five-year reviews.
In Timken U.S. Corp., the plaintiff-appellant, Timken U.S. Corporation ("Timken"), argued before the court that the Commission violated this requirement by failing to address the argument exporters in the subject countries would have an incentive to increase shipments to the United States if the orders under review were revoked, because prices for cylindrical roller bearings CCRBs") were higher in the United States than in other countries. The Commission argued, inter alia, that it was not obliged to address the argument because it was not "relevant" insofar as it pertained neither to a statutory factor nor any other factor that the Commission relied on in making its determination. (28)
The court found that Timken's proposed construction of the statute could not be reconciled with the Statement of Administrative Action ("SAA") or with judicial precedent. Specifically, the court noted that the URAA's "relevant arguments"...