2013 CIT 108
Ct. Intl. Trade2013Background
- ITC investigated alleged dumped and subsidized imports of steel drill pipe and drill collars from China (POI Jan 2007–Jun 2010); Commerce made affirmative AD/CVD determinations and ITC issued a final affirmative threat determination (3–3 vote split; three Commissioners in favor).
- Downhole Pipe, an importer and respondent before the ITC, challenged the ITC’s threat determination in Court of International Trade under 19 U.S.C. § 1516a, arguing errors in the like-product finding and in factual conclusions underlying the threat analysis.
- The ITC treated finished and unfinished ("green tube") drill pipe and drill collars as a single domestic like product; Downhole Pipe had argued for a separate unfinished like product in its prehearing brief but jointly filed a posthearing brief advocating a single like product.
- The ITC’s threat finding rested on several factual predicates: (1) sustained and growing market share for subject imports, (2) Chinese suppliers’ penetration into largest U.S. purchasers, (3) rising importer inventories of Chinese product, and (4) large/unused Chinese capacity and incentives to export.
- The court found two of the ITC’s factual findings unsupported by substantial evidence (the asserted initial absence of subject sales to large purchasers and the asserted ‘‘breakthrough’’ growth over the POI), and identified two other aspects (characterization of market share as "substantial" and importer inventory increases) requiring further explanation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ITC’s like-product determination (single like product including unfinished goods) is unsupported | Downhole Pipe: unfinished "green tubes" are a distinct like product and ITC erred by combining them | ITC: record (posthearing brief) shows respondents adopted single-like-product position; ITC properly determined one like product | Denied relief on estoppel/exhaustion grounds — plaintiff abandoned prehearing position and cannot litigate it here |
| Whether ITC’s finding that subject imports will increase significantly in volume is supported by substantial evidence | Downhole Pipe: ITC’s volume-growth findings rest on unsupported inferences about sales to large purchasers and inventories | ITC/Intervenors: other record evidence supports trend and volume concerns; errors harmless | Remanded — court rejects key volume-related findings as unsupported and finds error not harmless; ITC must reconsider without those findings |
| Whether ITC’s finding that subject imports will have significant price-depressing/suppressing effects is supported | Downhole Pipe: price-effect finding depends on flawed volume and market-penetration inferences | ITC: aggressive pricing at POI end and potential import increases justify price-effect finding | Remanded for reconsideration because price-effect finding relied on the unsupported volume/penetration inferences |
| Whether ITC adequately considered inventories and market-share data | Downhole Pipe: inventories and market-share trends do not support imminent injury | ITC: cited importer inventory increases and market-share growth in 1H2010 | Remand for additional explanation on (1) why market share was "substantial" and "grew" in 1H2010 given the data and (2) the significance of importer inventory trends |
Key Cases Cited
- Atl. Sugar, Ltd. v. United States, 744 F.2d 1556 (Fed. Cir.) (agencies must consider whole record, including detracting evidence)
- Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927 (Fed. Cir.) (agency must explain analysis and rational connection between record and conclusions)
- Trustees in Bankr. of N. Am. Rubber Thread Co. v. United States, 593 F.3d 1346 (Fed. Cir.) (judicial estoppel principles applied to litigant’s change in position)
- Chenery Corp. v. SEC, 332 U.S. 194 (U.S.) (court reviews agency on the basis of the reasons the agency gives)
- Nippon Steel Corp. v. United States, 458 F.3d 1345 (Fed. Cir.) (affirming ITC determination despite an ‘‘obvious error’’ where overall evidentiary basis warranted deference)