Acciai Speciali Terni, S.p.A. v. United States

19 Ct. Int'l Trade 1051
United States Court of International Trade·Decided August 7, 1995·No. Consolidated Court No. 94-07-00398·Published

Opinion

Opinion

Restani, Judge:

This matter is before the court on the parties’ cross-motions for judgment upon the agency record, which challenge the affirmative material injury determination by the United States International Trade Commission (“ITC” or “Commission”) with respect to certain grain-oriented silicon electrical steel (“GOES”) from Italy and Japan that was found to be subsidized and/or sold,at less than fair value (“LTFV”). Grain-Oriented Silicon Electrical Steel from Italy and Japan, USITC Pub. No. 2778, Inv. Nos. 701-TA-355 and 731-TA-660 (May 1994) (final affirmative determ.) (“Final Det. "I1 and Grain-Oriented Silicon Electrical Steel from Italy, USITC Pub. No. 2800, Inv. No. 731-TA-659 (Aug. 1994) (final affirmative determ.); 59 Fed. Reg. 28,561 (USITC 1994) (final) and 59 Fed. Reg. 42,285 (USITC 1994) (final) respectively.

I. Facts

Defendant-intervenors Allegheny-Ludlum Corporation, Armco, Inc., the Butler Armco Independent Union, the Zanesville Armco Independent Union, and the United Steelworkers of America are domestic manufacturers of GOES products, or unions related to the manufacture of these products. GOES, a flat-rolled steel product, is used in the manufacture of the cores of power and distribution transformers, as well as specialty transformers. Final Det. at II-4 (“Pub. Staff Rpt. ”). GOES is sold in sheet or strip form and possesses superior magnetic [1052] properties, including higher permeability and lower core loss, which make it a more efficient conductor than non-grain-oriented silicon electrical steel. Id.

GOES is differentiated by grades, with specifications that identify separate core-loss designations for conventional and high-permeability product types.2 Id. at II — 5. Within each grade, the average core loss of a product may vary from producer to producer. Id. Transformer manufacturers diverge in their approach to assessing a grade of GOES for purchase. Manufacturers of industrial transformers generally do not evaluate core-losses, and usually select M-6 grade. Id. at 11-30. Power and distribution transformer bids that are solicited by utility companies are evaluated by a “total ownership cost” (“TOC”) model. Id. at II-30-II-31. Utilities usually do not specify the grade of GOES required for use in a transformer design, but rather indicate other characteristics that affect a transformer manufacturer’s selection of grade, such as the amount, in dollars per watt, at which core loss and windings loss are evaluated by the utility, maximum limits for loss, impedance, and weight. Id. at 11-31. As a result, nearly all transformers sold to utilities are custom-designed to meet the requirements contained in autility company’s request for quotes. Id.

Some GOES, mostly M-6 grade, is used predominantly by stampers to punch laminations for use in equipment employing smaller transformers, such as appliances and aerospace, aeronautical and electronic equipment.3 Id. at II — 8. In general, the production process varies for high-permeability GOES as compared with conventional GOES. Id. For instance, in the manufacture of high-permeability permanently domain-refined (“PDR”) GOES, the product is etched by laser to improve magnetic properties, and further coated to improve electronic resistance. Id. at II — 6 & n.25, II — 8.

A. Parties’ contentions:

On August 26, 1993, defendant-intervenors filed with the Commission and the International Trade Administration of the United States Department of Commerce (“Commerce”) their petitions alleging that the domestic GOES industry was materially injured or threatened with material injury by reason of subsidized and/or LTFV imports from Italy and Japan. In October 1993, the Commission made preliminary determinations, finding there existed a reasonable indication that the domestic industry producing GOES was materially injured or threatened with material injury by reason of the subject imports from Italy and Japan. The Commission published the final results of its investigations on June 2, 1994 and August 17, 1994, respectively.

[1053] Motions for judgment upon the agency record pursuant to USCIT Rule 56.2 have been filed by (1) Acciai Speciali Terni, S.p.A., ILVAS.p.A. (in liquidation) and ILVA USA, Inc. (collectively “Acciai Speciali” or “Acciai”), and (2) Nippon Steel Corporation and Kawasaki Steel Corporation (collectively “Nippon Steel”), contesting portions' of the determination. Acciai Speciali challenges the Commission’s causation analysis with respect to volume and price effects of imports from Italy. Nippon Steel argues in its motion that the Commission failed to undertake a segmented analysis as to Japanese imports, and also challenges the Commission’s causation analysis as to volume and price effects of imports from Japan. Lastly, Nippon Steel asserts a deprivation of its right to due process. Nippon Steel specifically challenges the Commission’s rejection of Nippon Steel’s comments sent in response to information submitted by domestic producers late in the investigation. Defendant and petitioners oppose these motions.

B. ITC’s determination:

The majority of the Commission found that imports from both Italy and Japan caused material injury.4 The Commission noted that nearly all of the Italian imports consisted of low-efficiency conventional grade M-6 GOES, while the majority of Japanese imports was composed of high-permeability GOES. Final Det. atl-12-l-13. The Commission concluded that the low-efficiency Italian M-6 grade and the Japanese high-permeability GOES were not sufficiently fungible to support a finding of a reasonable overlap of competition, thus the Commission did not cumu-late the subject countries’ imports for purposes of assessing present material injury. Id. at I-13-I-14.

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