Autoliv Asp, Inc. v. United States

422 F.Supp.3d 1295

AUTOLIV ASP, INC., Plaintiff,

v. UNITED STATES, Defendant,andArcelormittal Tubular Products, Michigan Seamless Tube, LLC, PTC Alliance Corp., Webco Industries, Inc., Zekelman Industries, Inc., and Plymouth Tube Co., USA, Defendant-Intervenors.

Slip. Op. 19-154

Consol. Court No. 18-00037

United States Court of International Trade.

Decided: December 6, 2019

Kenneth G. Weigel and Chunlian Yang, Alston & Bird LLP, of Washington, DC, for Plaintiff Autoliv Asp, Inc.

Brian R. Soiset, Attorney, Office of the General Counsel, U.S. International Trade Commission, of Washington, DC, for Defendant United States International Trade Commission. With him on the brief were Dominic L. Bianchi, General Counsel, and Andrea C. Casson, Assistant General Counsel for Litigation.

R. Alan Luberda, Kathleen W. Cannon, and Melissa M. Brewer, Kelley Drye and Warren LLP, of Washington, DC, for Defendant-Intervenors Arcelormittal Tubular Products, Michigan Seamless Tube, LLC, PTC Alliance Corp., Webco Industries, Inc., Zekelman Industries, Inc., and Plymouth Tube Co., USA.

Gordon, Judge:

This consolidated action involves the final affirmative material injury determinations by the U.S. International Trade Commission ("ITC" or "Commission") in the countervailing duty ("CVD") and antidumping duty ("AD") investigations into imported cold-drawn mechanical tubing ("CDMT") from various countries. See Cold-Drawn Mechanical Tubing from China and India, 83 Fed. Reg. 4,269 (Int'l Trade Comm'n Jan. 30, 2018), and Cold-Drawn Mechanical Tubing from China, Germany, India, Italy, Korea, and Switzerland, 83 Fed. Reg. 26,088 (Int'l Trade Comm'n June 5, 2018), respectively ("Final Determinations"); see also Cold-Drawn Mechanical Tubing from China and India, Inv. Nos. 701-TA-576-577 (CVD Final), USITC Pub. 4755 (Jan. 2018), PD¹ 218 ("Views"), and Cold-Drawn Mechanical Tubing from China, Germany, India, Italy, Korea, and Switzerland, Inv. Nos. 731-TA-1362-1367 (AD Final), USITC Pub. 4790 (May 2018), PD 271.

Before the court is the USCIT Rule 56.2 motion for judgment on the agency record filed by Plaintiff Autoliv ASP, Inc. ("Autoliv"). See Pl.'s Mot. for J. on the Agency R., ECF No. 28 ("Pl.'s Mot."); see also Def.'s Resp. to Pl.'s Mot. for J. on the Agency R., ECF No. 29 ("Def.'s Resp."); Def.-Intervenors Arcelormittal Tubular Products, Michigan Seamless Tube, LLC, PTC Alliance Corp., Webco Industries, Inc., Zekelman Industries, Inc., and Plymouth Tube Co., USA's Resp. Opp. Pl.'s Mot. for J. on the Agency R., ECF No. 30 ("Def.-Intervenors Resp."); Pl.'s Reply in Supp. of Mot. for J. on the Agency R., ECF No. 31 ("Pl.'s Reply"). The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i),² and 28 U.S.C. § 1581(c) (2012). For the reasons set forth below, the ITC's final affirmative injury determinations are sustained.

I. Background

The statute governing unfair trade investigations requires a determination by the Commission on whether imported articles within the scope of a particular investigation (the "subject merchandise") have injured a domestic industry. See 19 U.S.C. §§ 1671, 1673. Domestic "industry" is defined as "the producers as a whole of the domestic like product...." 19 U.S.C. § 1677(4)(A). Three types of domestic injury are identified by statute: material injury, threat of material injury, or material retardation of the establishment of an industry. See 19 U.S.C. §§ 1671d(b)(1), 1673d(b)(1). There must be a causal nexus between a type of injury and imports of the subject merchandise, i.e., the injury must result "by reason of" imports of the subject merchandise. Id.

In order to make its determination, the Commission compares subject merchandise to its U.S. domestic counterpart, which by statute must be a product "which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation." 19 U.S.C. § 1677(10). The Commission relies on the "scope" of the subject merchandise provided by the U.S. Department of Commerce ("Commerce") to serve as the outside parameter for defining the domestic like product. See Views at 5 & n.13; see, e.g., NEC Corp. v. Dep't of Commerce, 22 C.I.T. 1108, 1110, 36 F.Supp.2d 380 (1998) ("[a]lthough the Commission must accept the determination of Commerce as to the scope of the imported merchandise sold at less than fair value, the Commission determines what domestic product is like the imported articles Commerce has identified").

If subject merchandise involves a range of products, as here, the Commission generally does not consider each iteration of merchandise to be a separate like product. Instead, the Commission considers the grouping of products to constitute a single domestic like product, and it will disregard minor variations among them absent a "clear dividing line" between particular products in the group. See Nippon Steel Corp. v. United States, 19 C.I.T. 450, 455, 1995 WL 170410 (1995) (the ITC "disregards minor differences, and looks for clear dividing lines between like products"); see also Tapered Roller Bearings from China, Inv. No. 731-TA-344 (Fourth Review), USITC Pub. 4824 at 5–14 (Sept. 2018) (describing variety of sizes specifications, and applications for tapered roller bearings but defining a single domestic like product without clear dividing lines between products).³

In determining the domestic like product here, the Commission relied on Commerce's definition of the scope, namely, all CDMT of carbon and alloy steel of circular cross-section, 304.8 mm or more in length, in actual outside diameters less than 331 mm, and regardless of wall thickness, surface finish, end finish, industry specification, production process (e.g., welded or seamless), further heat treatment or cold-finishing operations, or dual/multiple certification to standards. See Views at 5–6. Commerce's scope definition broadly covered CDMT steel products in which (1) iron predominates, by weight, over each of the other contained elements, and (2) the carbon content is two percent or less by weight. See id. at 6. In reaching its conclusion regarding injury, the Commission determined that there was a single domestic like product "that is coextensive with the scope of investigations." Id. at 15.

Autoliv imported "airbag tubing" for use in the manufacture of automotive safety airbag systems during the respective periods of the investigations ("POIs") of imported CDMT. In its comments to the Commission on the definition of the domestic like product, Autoliv did not dispute that the scope conceptually covered airbag tubing. Nevertheless, Autoliv contended that airbag tubing was a critical component of its production of airbag safety systems and that there was a "clear dividing line" in terms of production process, chemical and mechanical properties, and uses, between airbag tubing and CDMT generally. See, e.g., Views at 10–11, 13–15; Pl.'s Mot. at 4 (citing Prehearing Brief of Autoliv at 3, PD 165, CD 524). Autoliv further maintained that airbag tubing must be extremely hard, and at the same time ductile, in order to meet its critical safety purposes, and that there was no production currently of the domestic equivalent of airbag tubing nor did the domestic industry have plans to produce it. Id. Autoliv argued that the absence of domestic production did not preclude the Commission from finding airbag tubing to be a separate domestic like product and that the Commission should have, in these circumstances, considered whether domestic production of airbag tubing was materially retarded under the third prong of the statute.

In response, the petitioners argued that Autoliv did not timely file comments requesting the Commission to collect separate data on U.S.-produced products like or most similar to airbag tubing. See Views at 10. Petitioners further contended that Autoliv's argument for a material retardation analysis was misplaced because Autoliv did not and could not allege the existence of material retardation, given that there is an established domestic industry producing CDMT that had previously produced airbag tubing and that retains the equipment to do so. See id. at 10, 14.

Ultimately the Commission agreed with the petitioners, explaining that the statute precluded it from considering airbag tubing as a separate domestic like product because there were no "like" domestic products or production of airbag tubing during the POIs. See id. at 14–15. The ITC observed that the domestic industry included U.S. producers who had previously manufactured airbag tubing and did not currently manufacture airbag tubing but retained the capacity to do so. Id. at 14. Accordingly, the Commission determined that imports of CDMT from China, Germany, India, Italy, Korea, and Switzerland caused material injury to a U.S. industry. See Final Determinations.

II. Standard of Review

The court sustains the Commission's "determinations, findings, or conclusions" unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law."

19 U.S.C § 1516a(b)(1)(B)(i). More specifically, when reviewing agency determinations, findings or conclusions for substantial evidence, the court assesses whether the agency action is reasonable given the record as a whole. Nippon Steel Corp v. United States, 458 F.3d 1345, 1350–51 (Fed. Cir. 2006). Substantial evidence has been described as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." DuPont Teijin Films USA v. United States, 407 F.3d 1211, 1215 (Fed. Cir. 2005) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938) ). Substantial evidence has also been described as "something less than the weight of evidence, and the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's findings from being supported by...