Overview of 2010 decisions by the U.S. Court of International Trade in Appeals of determinations of the U.S. International Trade Commission.

TABLE OF CONTENTS

I. INTRODUCTION

II. THE COURT UPHOLDS THE ITC's DE-CUMULATION OF SUBJECT
  COUNTRIES THAT HAVE AFFILIATED FACILITIES WITH A U.S.
  PRODUCER
  A. ArcelorMittal's Limitation of Subject Imports
  B. Regional Imports and Pricing Practices
  C. Prior Business Practices
  D. Neglected Volume Considerations
  E. Potential Price Effects
  F.  Likely Impact

III. THE COURT CONTINUES TO REQUEST THAT THE ITC FIND ITS
  BEARINGS IN A SUNSET REVIEW
  A. NSK IV
  B. NSK V

IV. CONCLUSION

I. INTRODUCTION

Under 28 U.S.C. [section] 1581(c), the U.S. Court of International Trade (CIT) has jurisdiction to review antidumping (AD) and countervailing duty (CVD) determinations made by the U.S. International Trade Commission (ITC). During 2010, the CIT issued six decisions related to decisions made by the ITC. Of the six, the CIT affirmed one negative remand determination in a sunset review involving hot-rolled steel products and, on two occasions, continued to sustain and/or remand aspects of the ongoing sunset review litigation involving ball bearings from the United Kingdom. These three cases are discussed further below and reflect the ongoing tug-of-war between the Court and the ITC as to the amount of evidence and analysis required by the Court from the ITC to conclude whether final determinations are supported by substantial evidence on the record or otherwise in accordance with law. (1)

II. THE COURT UPHOLDS THE ITC's DE-CUMULATION OF SUBJECT COUNTRIES THAT HAVE AFFILIATED FACILITIES WITH A U.S. PRODUCER

In Nucor Corp. v. United States, the CIT affirmed in its entirety (2) the ITC's negative remand determination involving the sunset review of hot-rolled steel products from various countries. (3) Plaintiff Nucor and Plaintiff-Intervenors U.S. Steel Corporation and AK Steel Corporation initially appealed the ITC's negative final determination (4) regarding the CVD order on hot-rolled steel products from South Africa and the AD orders on hot-rolled steel from Kazakhstan, Romania, and South Africa, alleging that the ITC's final determination was unsupported by substantial evidence. (5) In its initial opinion, the Court found that the ITC failed to provide an adequate explanation or substantial evidentiary support for its findings related to likely volume, price effect, and impact of subject imports from the three countries. The Court, therefore, remanded the case back to the ITC and instructed it to explain more fully its negative determination. (6)

On remand, the ITC's negative determination remained unchanged from its final determination and the Plaintiff and Plaintiff-Intervenors continued to assert that the negative determination was unsupported by substantial evidence or otherwise contrary to law and urged the Court to remand the matter for further consideration. (7) The ITC, along with amicus curiae ArcelorMittal USA, (8) argued that the negative determination should be sustained. (9) In its opinion of the ITC's negative remand determination, the Court examined the six specific areas of its remand order. (10)

A. ArcelorMittal's Limitation of Subject Imports

In the remand determination, the ITC once again found that ArcelorMittal's likely behavior with respect to its hot-rolled steel operations in Kazakhstan, Romania, and South Africa would not result in significant volumes of subject imports entering the U.S. market. (11) The ITC based its finding on information submitted by ArcelorMittal, in both the original sunset review and the remand proceeding. According to the ITC, ArcelorMittal's strategy of having its subsidiaries supply home and regional markets and not the export markets where the company is a producer, limited the motivation of the producers in those countries to increase shipments to the United States and maximized domestic production, serving to maintain price stability and promote ArcelorMittal's overall corporate interests. (12) In supporting this position, the ITC pointed to record evidence indicating the substantial investment ArcelorMittal had made in its subsidiary, Mittal USA, a large and prominent producer in the U.S. market. (13) In addition, Mittal USA had the right to veto any imports from other ArcelorMittal facilities. (14) The ITC also pointed to empirical data on record from the U.S. importer questionnaires indicating that U.S. hot-rolled steel imports by ArcelorMittal decreased subsequent to the merger of Arcelor SA and Mittal Steel Co. NV. (15) Finally, the ITC explicitly rejected a theoretical model put forth by Nucor supposedly showing that ArcelorMittal would likely benefit from imports from the three countries even if doing so caused harm to Mittal USA. The ITC stated that the model lacked probative value because it lacked any documentation to support the figures reported and that even a slight variation of these figures could result in a completely different outcome. (16)

Nucor's arguments focus around an ArcelorMittal director/officer's fiduciary duty to maximize profits of the entire company. Specifically, if ArcelorMittal could produce and sell steel in the United States more profitably through its overseas mills, then it would do so. (17) In support of this theory, U.S. Steel submitted two hypothetical profit maximization scenarios purporting to show how ArcelorMittal would be better served by importing hot-rolled steel from its affiliated companies and still cause prices to fall. (18)

In response to these arguments, the Court stated that the ITC acted within its discretionary authority when it discounted the probative value of the models and scenarios. (19) The Court supported the ITC pointing to gathered evidence from the record in support of its conclusion as sufficient to meet the agency's burden of offering a rational basis between the facts found and the choices made; the Court pointed to the ITC's use of U.S. importer questionnaire data as evidence in support of ArcelorMittal's corporate policy of giving Mittal USA a right to veto any imports from other ArcelorMittal facilities. (20) Notably, the Court also addressed Nucor's and U.S. Steel's speculative assertions and stated that "the mere plausibility of a set of given circumstances is insufficient to overcome the high barrier to reversal of an agency determination ... and Plaintiffs [ ] have offered only innuendo and speculation as evidence to the contrary." (21) In other words, the ITC's decision to put greater …