Hitachi Metals, Ltd. v. United States

949 F.3d 710

• Court: Court of Appeals for the Federal Circuit
• Decided: February 7, 2020
• Docket: 19-1289
• Status: Published

Opinion

Case: 19-1289 Document: 57 Page: 1 Filed: 02/07/2020

United States Court of Appeals for the Federal Circuit ______________________

HITACHI METALS, LTD., HITACHI METALS AMERICA LLC, Plaintiffs-Appellants

DAIDO STEEL CO., LTD., Plaintiff

v.

UNITED STATES, ARCELORMITTAL USA LLC, NUCOR CORPORATION, Defendants-Appellees ______________________

2019-1289 ______________________

Appeal from the United States Court of International Trade in Nos. 1:17-cv-00140-MAB, 1:17-cv-00165-MAB, Judge Mark A. Barnett. ______________________

Decided: February 7, 2020 ______________________

DANIEL CANNISTRA, Crowell & Moring, LLP, Washing- ton, DC, argued for plaintiffs-appellants. Also represented by ROBERT L. LAFRANKIE, PIERCE LEE.

BRIAN RUSSELL SOISET, Office of General Counsel, United States International Trade Commission, Washing- ton, DC, argued for defendant-appellee United States. Also Case: 19-1289 Document: 57 Page: 2 Filed: 02/07/2020

represented by ANDREA C. CASSON, DOMINIC L. BIANCHI.

BROOKE MICHELLE RINGEL, Kelley Drye & Warren, LLP, Washington, DC, argued for defendant-appellees Arcelormittal USA LLC, Nucor Corporation. Defendant- appellee Arcelormittal USA LLC also represented by KATHLEEN CANNON, ROBERT ALAN LUBERDA, PAUL C. ROSENTHAL.

ALAN H. PRICE, Wiley Rein, LLP, Washington, DC, for defendant-appellee Nucor Corporation. Also represented by STEPHANIE MANAKER BELL, CHRISTOPHER B. WELD. ______________________

Before MOORE, REYNA, and STOLL, Circuit Judges. REYNA, Circuit Judge. In 2017, the U.S. International Trade Commission is- sued a final affirmative determination that a U.S. domestic industry was materially injured by virtue of imported steel goods sold at less than fair value. Hitachi appealed to the United States Court of International Trade, challenging the Commission’s “domestic like product” determination. The Court of International Trade affirmed the Commis- sion’s domestic like product determination. Hitachi ap- peals that judgment. Because we conclude that the Commission’s “domestic like product” determination is supported by substantial evidence and otherwise not con- trary to law, we affirm. BACKGROUND This case arises from an antidumping duty investiga- tion on imports of carbon and alloy steel cut-to-length plate Case: 19-1289 Document: 57 Page: 3 Filed: 02/07/2020

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(“CTL plate”). 1 On April 8, 2016, three domestic producers of CTL plate (“petitioners”) filed petitions with the U.S. De- partment of Commerce (“Commerce”) and the U.S. Inter- national Trade Commission (“Commission”), alleging that imports of CTL plate from twelve countries, including Ja- pan, were sold in the United States at less than fair value, and that an industry in the United States was materially injured as a result. Carbon and Alloy Steel Cut-to-Length Plate, 81 Fed. Reg. 22116 (April 14, 2016) (Institution De- cision). Both the Commission and Commerce initiated an- tidumping duty investigations. Id. Hitachi Metals, Ltd., and Hitachi Metals America, LLC (“Hitachi”) joined the Commission investigation, identifying itself as “a Japanese producer . . . and U.S. importer of carbon and alloy steel cut-to-length plate.” Carbon and Alloy Steel Cut-to-Length Plate, Inv. No. 701-560 USITC Pub. 590311 (Sept. 12, 2016). I. “Domestic Like Product” Commerce and the Commission play separate and dis- tinct roles in the administration of antidumping duty in- vestigations. 19 U.S.C. § 1673. Generally, Commerce investigates whether certain imported articles are sold in the United States at less than fair value, i.e., “dumped.” Cleo Inc. v. United States, 501 F.3d 1291, 1294 (Fed. Cir. 2007). The Commission investigates whether a U.S. “do- mestic industry” is materially injured or threatened with material injury by reason of those imports. Id. at 1295. Central to antidumping duty investigations, and cen- tral to this appeal, are Commerce’s and the Commission’s separate determinations as to the products relevant to their respective inquiries. Commerce identifies the scope

1 The investigations involved both antidumping duty and countervailing subsidies investigation. This appeal in- volves only the antidumping duty investigation. Case: 19-1289 Document: 57 Page: 4 Filed: 02/07/2020

of imported articles subject to the investigation, referred to as the “subject merchandise.” Pesquera Mares Australes Ltda. v. United States, 266 F.3d 1372, 1374–75, 1375 n.2 (Fed. Cir. 2001); see 19 U.S.C. § 1677(25). The Commission, on the other hand, determines the “domestic like product.” The “domestic like product” is a U.S. product “which is like, or . . . most similar in characteristics and uses” to the sub- ject merchandise. Cleo Inc., 501 F.3d at 1295 (quoting 19 U.S.C. § 1677(10)). The Commission’s definition of which domestic goods constitute “like products” determines the relevant domestic industry and, in turn, the scope of the Commission’s injury analysis. Id. By statute, the Commission’s “domestic like product” analysis begins with a review of the “articles subject to in- vestigation,” i.e., the subject merchandise as determined by Commerce. 19 U.S.C. § 1677(10) (defining “domestic like product” as a “product which is like, or in the absence of like, most similar in characteristics and uses with, the ar- ticle subject to an investigation” (emphasis added)). The Commission then conducts a six-factor inquiry that evalu- ates whether the subject merchandise corresponds with a single domestic like product or multiple domestic like prod- ucts. Cleo, 501 F.3d at 1295. Specifically, the Commission compares the imported articles and domestic products by considering: (1) physical characteristics and uses; (2) chan- nels of distribution; (3) interchangeability; (4) customer and producer perceptions; (5) common manufacturing facil- ities, production processes, and production employees; and where appropriate (6) pricing. Id.; Timken Co. v. United States, 913 F. Supp. 580, 584 (Ct. Int’l Trade 1996). The Commission may determine that the subject merchandise identified by Commerce encompasses one or more domestic like products. Cleo, 501 F.3d at 1295. II. The Commission’s Investigation In May 2016, the Commission published its prelimi- nary determination which included a preliminary like Case: 19-1289 Document: 57 Page: 5 Filed: 02/07/2020

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product determination. Carbon and Alloy Steel Cut-to- Length Plate, 81 Fed. Reg. 33705–06 (May 27, 2016) (Pre- liminary Determination); J.A. 121–136. The Commission reviewed Commerce’s subject merchandise determination and then performed the six-factor analysis based on the ev- identiary record existing at that time. J.A. 121–133. The Commission concluded that the U.S. domestic industry consists of “a single domestic like product consisting of all CTL plate coextensive with the scope of these investiga- tions.” J.A. 130 (emphasis added). Specifically, the Com- mission defined the domestic like product as: Certain carbon and alloy steel hot-rolled or forged flat plate products not in coils, whether or not painted, varnished, or coated with plastics or other non-metallic substances. Subject merchandise in- cludes plate that is produced by being cut-to-length from coils and plate that is rolled or forged into a discrete length. The products covered include (1) Universal mill plates (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm but not exceeding 1250 mm, and of a thickness of not less than 4 mm, which are not in coils and without patterns in re- lief), and (2) hot-rolled or forged flat steel products of a thickness of 4.75 mm or more and of a width which exceeds 150 mm and measures at least twice the thickness, and which are not in coils, whether or not with patterns in relief. The covered products described above may be rectangular, square, circu- lar or other shapes and include products of either rectangular or non-rectangular cross-section where such non-rectangular cross-section is achieved sub- sequent to the rolling process, i.e., products which have been ‘‘worked after rolling,’’ (e.g., products which have been beveled or rounded at the edges). J.A. 122–23. The Commission also incorporated certain limitations adopted in Commerce’s subject merchandise Case: 19-1289 Document: 57 Page: 6 Filed: 02/07/2020

determination, such as limitations related to width and thickness, iron and carbon content, and third country pro- cessing. Id. In addition, the Commission incorporated Commerce’s seven express exclusions, which included: “products clad, plated, or coated in metal,” “military grade armor plate,” “stainless steel plate,” and “[a]lloy forged and rolled CTL plate.” J.A. 123–127. None of the limitations or exclusions related to tool steel. After the preliminary determination, the Commission issued questionnaires to relevant parties, including domes- tic producers, importers, purchasers, and foreign producers in the subject countries. See 19 CFR § 207.20(b). Before issuing the questionnaires, the Commission circulated drafts to the parties for comment. Id. Three importers, including Hitachi, submitted comments, asking the Com- mission to collect separate data for “tool steel” so that the Commission could consider whether tool steel is a separate domestic like product. The Commission granted the re- quest and issued a supplemental questionnaire seeking tool steel data from domestic producers. Four domestic producers responded with information. The Commission also contacted domestic producers who did not respond to the questionnaire. The Commission also collected addi- tional data via telephone and email from several of those producers.

After receiving additional briefing and conducting the public hearing, the Commission undertook another domes- tic like product analysis in view of the full record. The Commission “examined closely whether the record sup- port[ed] finding a clear dividing line between tool steel and high speed steel on the one hand, and other CTL plate prod- ucts on the other.” J.A. 2118; see also J.A. 2111–2119. Af- ter noting that the evidence was “mixed,” the Commission found no clear dividing lines between tool steel and other CTL plate products and concluded that defining tool steel as a separate domestic like product was “not warranted.” Id. As a result, the Commission reaffirmed its preliminary Case: 19-1289 Document: 57 Page: 7 Filed: 02/07/2020

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determination of a single domestic like product coextensive with Commerce’s subject merchandise determination. Id.

III. Court of International Trade Hitachi appealed the Commission’s final determina- tion to the Court of International Trade. 2 Hitachi argued that the Commission’s like product determination was le- gally erroneous and unsupported by substantial evidence. The Court of International Trade rejected Hitachi’s argu- ments and affirmed the Commission’s determination. Hitachi timely appealed. We have jurisdiction under 28 U.S.C. § 1295(a)(5). DISCUSSION This court conducts de novo review of appeals from the Court of International Trade that involve a Commission like product determination. In doing so, we apply the same standard of review applied by the Court of International Trade: we ask whether the Commission’s like product de- termination is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.” 19 U.S.C. §§ 1516a(b)(1)(B)(i), 1516a(a)(2)(B)(i); Nippon Steel Corp. v. United States, 458 F.3d 1345, 1350 (Fed. Cir. 2006). Under the substantial evidence standard of review, “we must affirm a Commission determination if it is reasonable and supported by the record as a whole, even if some evi- dence detracts from the Commission’s conclusion.” Altx, Inc. v. United States, 370 F.3d 1108, 1121 (Fed. Cir. 2004) (internal citations and quotations omitted). While a party “may disagree with the conclusions drawn by the Commis- sion and offer reasonable, alternate explanations . . . , it is

2 Daido Steel Co., Ltd. joined Hitachi in appealing the Commission’s final determination to the Court of Inter- national Trade. For purposes of this opinion, we refer to both parties as “Hitachi.” Case: 19-1289 Document: 57 Page: 8 Filed: 02/07/2020

not the role of this court to refind the facts or interpose [our] own determinations.” Id. at 1123–24 (internal quota- tions omitted). Hitachi raises essentially the same three arguments that it raised to the Court of International Trade. Hitachi contends that the Commission’s like product determination was erroneous because: (i) the Commission unlawfully pre- sumed that the domestic like product was coextensive with Commerce’s subject merchandise determination; (ii) the Commission’s inclusion of tool steel unlawfully ignored a 35-year established agency practice; and (iii) the Commis- sion’s inclusion of tool steel was not supported by substan- tial evidence. We address each argument in turn. First, Hitachi contends that the Commission’s like product analysis was legally erroneous because the Com- mission “employed a presumption that the domestic like product is coextensive with the scope” of investigation. Ap- pellant Br. 21–24; Oral Arg. at 1:30–7:15. Hitachi explains that Congress separately defined “domestic like product” and “subject merchandise” in 19 U.S.C. § 1677, and that the Commission failed to give those terms their separate meanings. Appellant Br. 17–18. Hitachi further contends that the Commission’s use of an “unlawful presumption” is evidenced by its “arbitrary” inclusion of tool steel and ex- clusion of “very similar” products like stainless steel. Ap- pellant Br. at 24, 41 n.18. Hitachi asserts that the subject merchandise is “irrelevant” to the Commission’s like prod- uct determination. Appellant Br. 22 (“whether a product falls in or out of the scope is irrelevant when determining whether it constitute[s] a separate like product”). We dis- agree. Commerce’s subject merchandise determination is not “irrelevant” to the Commission’s like product determina- tion. Just the opposite: the subject merchandise determi- nation is “necessarily the starting point of the Commission’s like product analysis.” Cleo, 501 F.3d at Case: 19-1289 Document: 57 Page: 9 Filed: 02/07/2020

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1298 n.1 (citing 19 U.S.C. § 1677(10)). The statute re- quires the Commission to consider Commerce’s subject merchandise determination in reaching its own like prod- uct determination. To do otherwise risks creating two dis- connected agency investigations. Hitachi cites cases holding that the Commission’s like product determination must be “separate and distinct” from Commerce’s subject merchandise determination. Ap- pellant Br. 19–20 (citing Hosiden Corp. v. Advanced Dis- play Mfrs. Of Am., 85 F.3d 1561, 1567 (Fed. Cir. 1996); Acciai Speciali Terni S.p.A. v. United States, 118 F. Supp. 2d 1298, 1304 (Ct. Int’l Trade 2000)). Those cases do not support Hitachi’s arguments. There is no dispute that the Commission’s like product determination must be separate and distinct from Commerce’s subject merchandise deter- mination. See Hosiden, 85 F.3d at 1568 (“Commerce’s des- ignation of the class or kind of merchandise sold at [less than fair value] does not control the Commission’s defini- tion of the industry injured in its sales of like products.”). Hitachi cites no authority that precludes the Commission from determining that the domestic like product and the subject merchandise are coextensive. See 19 U.S.C. § 1677(10) (defining domestic like product as the product “most like . . . the article subject to investigation” (empha- sis added)). We are also unpersuaded by Hitachi’s argument that the Commission was required to compare tool steel to prod- ucts outside of Commerce’s subject merchandise determi- nation. See Appellant Br. 24, 41 n.18. The statute does not require such a broad analysis. 19 U.S.C. § 1677(10). To the contrary, it instructs the Commission to confine its like product determination to a comparison between domestic products and “the article subject to an investigation.” See id. Hitachi provides no authority to the contrary. In Cleo, we rejected the argument that “the Commis- sion allowed Commerce’s finding to shape its like product Case: 19-1289 Document: 57 Page: 10 Filed: 02/07/2020

determination.” 501 F.3d at 1298 n.1. We noted that the Commission had expressly recognized the “settled rule that Commerce’s [subject merchandise] finding does not control the Commission’s [like product] determination.” Id. In the present case, the Commission expressly articulated the same rule: Although the Commission must accept Commerce’s determination as to the scope of the imported mer- chandise that is subsidized or sold at less than fair value, the Commission determines what domestic product is like the imported articles Commerce has identified. . . . Cleo, 501 F.3d at 1298 n.1 (“Com- merce’s [scope] finding does not control the Com- mission’s [like product] determination]”). J.A. 2088–2089, 2089 n.12 (brackets in original). Here, as in Cleo, “we do not perceive that the Commission’s like product analysis was biased towards finding . . . a single like product in order to conform its finding with the scope of Commerce’s [determination].” See Cleo, 501 F.3d at 1298 n.1. Second, Hitachi argues that the Commission’s like product analysis was legally erroneous because it disre- garded a 35-year “established practice” of “treating tool steel as separate and distinct from all other steel.” Appel- lant Br. 25–28. Hitachi explains that the Commission failed to either “conform itself to its prior decisions or ex- plain the reasons for departing from” its long-established agency practice. Appellant Br. 30. We disagree. The cases Hitachi cites involve proceedings brought under different statutory provisions, different products, and different periods of investigation. See J.A. 19–29. Hi- tachi fails to cite a single antidumping investigation that involved the same subject merchandise as this case and where tool steel was excluded from the Commission’s defi- nition of domestic like product. See id. As we have previ- ously explained, each antidumping duty investigation “is Case: 19-1289 Document: 57 Page: 11 Filed: 02/07/2020

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sui generis, involving a unique combination and interaction of many economic variables.” Nucor Corp. v. United States, 414 F.3d 1331, 1340 (Fed. Cir. 2005). That the Commission reached different outcomes in cases with different circum- stances “do[es] not indicate that the Commission either committed legal error in the methodology it used in this case or departed from the mode of analysis it regularly em- ploys.” Cleo, 501 F.3d at 1299. Third, Hitachi argues that the Commission’s like prod- uct analysis is not supported by substantial evidence. Hi- tachi does not contest any specific aspect of the Commission’s factual findings. Instead, Hitachi faults the Commission for having “failed to fully collect” the infor- mation relevant to its like product analysis, and that the Commission “disregarded more than 90 percent of [the] rel- evant industry.” Appellant Br. 44–45, 50. Hitachi argues that the Commission’s failure to collect data led to an in- firm record and renders the like product determination un- supported by substantial evidence. We disagree. The Commission satisfied its obligation to conduct “in- vestigative activities” under 19 CFR § 207.20(b). In re- sponse to the supplemental questionnaires it issued at Hitachi’s request, the Commission received data from four domestic tool steel producers. The Commission also sought out non-responding manufacturers via telephone and email, and successfully collected data from several of those parties. Contrary to Hitachi’s argument that the Commis- sion “disregarded” information from tool steel producers, the record shows that several entities Hitachi named as tool steel producers reported that they do not produce tool steel. Based on the administrative record, we conclude that the Commission’s like product investigation and evi- dence collection was not unreasonable. As a result, the Commission’s like product conclusions are supported by “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consol. Edison Co. of New York v. N.L.R.B., 305 U.S. 197, 229 (1938). Case: 19-1289 Document: 57 Page: 12 Filed: 02/07/2020

We have considered Hitachi’s other arguments and find them unpersuasive. CONCLUSION Finding no error in the Commission’s like product de- termination, we affirm the judgment of the Court of Inter- national Trade. AFFIRMED COSTS No costs.