A review of the Court of International Trade's 2014 decisions addressing trade remedy determinations of the U.S. International Trade Commission.

Author:Casson, Andrea C.
Position:P. 53-78
  1. Decisions In 2014 Involving Remands To The Commission

    When the CIT remands a case to the ITC, the court retains jurisdiction over the matter. The court can either affirm the Commission's determination, or remand the determination to the Commission to correct or explain certain issues as instructed by the court. In most cases, the court has included in its remand instructions a due date for the agency to return a revised determination that addresses the issues remanded by the court. Typically the parties have been given the opportunity to file Comments presenting their views on the remand determination. A party that is aggrieved by the agency's remand determination therefore would not file a new summons and complaint, but rather would present its objections to the remand determination in its remand Comments. After briefing by the parties concerning the agency's remand determination, the court issues a new decision, again either affirming the Commission's remand determination, and/or remanding all or some aspects of the case back to the agency.

    The court recently amended its rules to adopt uniform procedures for the review of ITC and Department of Commerce remand determinations. The new rule, found at subsection (h) of CIT Rule 56.2, specifically provides for private parties and the agency to file comments addressing issues arising from an agency's remand determination. (128) In many respects, this amendment implements existing traditional procedures already followed by most CIT judges.

    Although decided before the formal Rules amendment, several decisions issued in 2014 demonstrate the operation of the usual approach regarding remands. In 2014, the court issued decisions in two cases involving its review of ITC remand determinations returned to the court in response to CIT remand orders issued in 2013. As discussed below, in both cases the court affirmed in full the Commission's remand determinations. A third case decided in 2014 illustrates how the court may use its remand power to seek further explanation and clarity from the Commission on a few specific issues while otherwise affirming the Commission's findings in other respects.

    1. Swiff-Train Co. v. United States: The Court Upholds the Commission's Remand Determination in All Respects

      This case involved an appeal by importers from the Commission's affirmative material injury determination in the investigation of multilayered wood flooring (MLWF). In 2013, the CIT remanded four issues and affirmed all other aspects of the Commission's determinations. (129) The Commission issued its Remand Views on September 30, 2013. In the Remand Views, the Commission addressed each remanded issue in detail, and again determined that the domestic industry was materially injured by reason of subject imports from China. On July 16, 2014, the CIT affirmed the Commission's Remand Views. (130)

      a. Domestic Industry Definition

      In order to comply with the Swiff-Train Co. v. United States (Swiff-Train I) instructions that the Commission investigate whether hardwood plywood manufacturers were part of the domestic industry, the Commission reopened the record to identify and evaluate whether domestic hardwood plywood manufacturers made product that is used for flooring. Since all hardwood plywood manufacturers who received questionnaires on remand indicated that they did not produce MLWF during the period of investigation, the Commission again concluded that hardwood plywood manufacturers were not part of the domestic industry producing MLWF. In Swiff-Train II, the court agreed that the definition of the domestic MLWF industry as investigated in the original investigations (i.e., as not including hardwood plywood manufacturers) was supported by the record. (131)

      In addition, the court rejected plaintiffs' claim that the remand investigation was procedurally defective because the Commission did not allow the parties to comment anew on the producer questionnaires for purpose of sending these questionnaires to the hardwood plywood producers. In this regard, the court noted that plaintiffs had been given the opportunity to comment on the producer questionnaires during the original investigation, and that the Commission followed its usual practice here insofar as it did not solicit comments on the questionnaires during the remand investigation. As the court observed on remand, the Commission had discretion over what additional information to solicit from the identified domestic hardwood plywood producers in order to comply with the Swiff-Train I instructions. (132)

      b. Price Effects Analysis

      In Swiff-Train I, the court had affirmed the Commission's finding of a significant volume of subject imports, and its finding of significant underselling by subject imports. (133) The court, however, had remanded the Commission's price effects analysis, directing the Commission to make "explicit findings on the effect of the subject imports on the price suppression and depression factors" and to explain in its price effects analysis economic issues addressed by the dissenting Commissioner. (134)

      In its Remand Views, the Commission explained that it did not find significant price depression or significant price suppression, but that the evidence on price depression, while not "significant" within the meaning of the statute, supported its affirmative determinations. The court found that the Commission's price effects analysis was supported by substantial evidence and "must therefore be sustained." (135)

      c. Causation

      Perhaps the most significant aspect of Swiff-Train II is the court's endorsement of the Commission's explanation on remand of its causation analysis. This is all the more so in light of the Federal Circuit's approval of the Commission's approach to causation with the affirmance of the CIT's decision. (136)

      i. The Commission's Remand Views

      With respect to causation, the CIT in Swiff-Train I had acknowledged that the Commission addressed other factors that might have had an effect on the domestic industry during the POI, and affirmed the Commission's analysis of the role of non-subject imports, as well as the Commission's analysis of substitute flooring products. The CIT, however, had found the Commission's determinations to be "unsupported by substantial evidence because the Commission failed to adequately consider the effect that the severe disruption of the home building and remodeling industries had on the domestic like product industry." (137) In Swiff-Train I, the court had cautioned that the Commission "needs to ensure that the subject imports, as compared to other economic factors affecting the domestic industry, were not a but-for cause of the injury." (138)

      On remand, the Commission responded in detail to the CIT's concerns regarding causation. The Commission again found that the record supported its finding that the significant and increasing volume of subject imports that were underselling the domestic like product at significant margins had a significant adverse impact on the domestic industry's condition. (139) In accordance with the governing statute as well as judicial guidance, the Commission examined factors other than subject imports to ensure that it was not attributing injury from these sources to the subject imports. (140) Accordingly, the Commission considered the role of demand, substitute flooring products, and non-subject imports, and explained how it did not attribute injury from them to subject imports. The Commission explained that it had ensured that it was not inflating an otherwise incidental, tangential, or trivial cause of injury into one that satisfies the statutory material injury threshold.

      The Commission recognized that, under Federal Circuit precedent, an affirmative determination must be supported by the identification of "substantial evidence in the record demonstrating the domestic industry is materially injured by reason of subject imports notwithstanding any record evidence of other factors that might also be having adverse effects on the industry at the same time." (141) In accordance with the CIT's remand order, the Commission again considered the role of demand and explained in further detail why demand conditions did not break the causal link between subject imports and the material injury to the domestic industry. The Commission explained that, although demand declined overall during the POI, the overall percent decline in the absolute volume of subject imports was significantly less than the percent decline in apparent U.S. consumption, enabling subject imports to increase significantly their share of the declining U.S. market. Thus, the Commission found that the domestic industry's loss of market share to unfairly traded subject imports from China that significantly undersold the domestic like product throughout the POI was not a function of demand. (142)

      The Commission also examined the relationship between demand and domestic industry performance between 2008 and 2009, concluding that the domestic industry's loss of market share to unfairly traded subject imports that significantly undersold the domestic like product during the period could not be described as a function of demand. Thus, notwithstanding demand declines between 2008 and 2009 and an overall demand decline during the period of investigation, the Commission found that subject imports from China "had a material impact on the domestic industry" during this period. (143)

      Responding to an argument raised by plaintiffs, the Commission also addressed the relative effects of subject imports and demand during the January 2009 to June 2011 period. The Commission found that the domestic industry disproportionately bore the burden of the economic downturn during the period and did not share proportionately in market improvements, resulting in steep employment and wage declines. (144)

      As the Commission further explained, "the apparent improvement in the domestic industry's"...

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