Slip Opinion 04- 131 UNITED STATES COURT OF I NTERNATIONAL

TRADE

__________________________________________ : NIPPON STEEL CORPORATION, : NKK CORPORATION, : KAWASAKI STEEL

CORPORATION : and : TOYO KOHAN CO., LTD., : : Plaintiff s, :

: v. : Court No. 00-09-00479 : UNI TED STATE S, : Public Version : Defend ant, :

: WEIRTON STEEL CORPORATION, : : Defendant-Inte

rvenor. : __________________________________________: [ITC second remand determination re manded. ] Dated: October 14, 2004 Willkie Farr & Gallagher ( William H. Barringer , Christopher Dunn , James P. Durling , Dan iel L. Porter , and Robert E. DeFrancesco ) for plaintiffs. Ly n M. Schlitt , Director of Office of External Relations, James M. Ly ons , Gener

al Counse l, Marc A. Bernste in , Assistant General Counsel, United States Interna tional Trade Commission ( Laurent de Winter and Neil Joseph Reynolds ) for def endant. Schagr in Associa

tes ( Roger B . Schag

rin ) for defendant-intervenor.

OPINION RESTANI, Chief Judge: Before the court is the United States I nternational Trade Commission’s (“Commission” or “ITC”) sec ond remand determination concerning tin- and c hromium-coated steel sheetC OURT N O
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(“TCCSS”) imports from Japan. In its original determination, the Commission concluded that the United States TCCSS industry was materially injured by rea son of TCCSS imports from Japan (“subject imports”) that were sold at less than fair value (“ LTFV”). Tin- and C hromiumCoated Steel Sheet From Japan , 65 Fed. Reg. 50,005, USI TC Pub. 3300, Inv. No. 731-TA-860 (final determ.) (Aug. 2000) (A.R. 2-148) [hereinafter Final Determination ]. Although the court found the Commission’s conclusions with respect to subject import volume supported by substantial evidence, the court ordered the Commission to reevaluate its ana lysis of the effe ct of subject imports on domestic pricing as well as its conclusions with respect to causation. Nippon Steel Corp. v. United States , 182 F. Supp. 2d 1330, 1356 (Ct. Int’l Trade 2001) (“ Nippon I ”). On reman d, the Commi ssion ag ain dete rmined tha

t the dome stic indust

ry was mate rially injured by rea son of subject imports. Tin- and Chromium-Coated Steel Sheet from Japan , Inv. No. 731-TA-860 (final determ.) (March 2002) (A.R. 2-261R) [hereinafter First Remand Determination ]. After reviewing the Commission’s explanations and the evidence, the court found otherwise. Nippon Steel Corp. v. United States , 223 F. Supp. 2d 1349 (Ct. Int’l Trade 2002) (“ Nip pon II ”). The court held that uncontested evidence e stablished that LTFV subject imports did

not have a

materia l effect on domest

ic price s and that t

here wa s no valid r

eason to discount non-price factors or non-subject imports as the predominant ca use of material injury

. Id. Furthermore, the court found that a rema nd for reconsideration or recalcula tion was not

necessa ry because the Commissi on had “d

emonstra ted an unw

illingne ss or inab ility

to addre ss the substantial claims made by the r espondents or the concerns expressed by the court in Nippon I. . .” Id. at 1371–72. Instead, the court vac ated the affirmative injury finding and directed the Commission to enter a negative material injury determination. Id. at 1372.C OURT N O
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1 The Commission made this determination in a 4-2 vote. Chairman Okun, Vice Chairman Hillman, and Commissioners Miller and Lane join in the majority views. Commissioners Koplan and Pearson dissent. Commissioner Koplan reaffirms his original dissenting views, finding that an industry in the United States is not materially injured by reason of subject imports from Japan. See Tin- and Chromium-Coated Steel Sheet from Japan , Inv. No. 731-TA-860 (Final), Publication 3337 (Aug. 2000) at 21. Commissioner Pearson did not participate in either the original vote or the vote on the f irst remand. He adopts as his own the views of the Commission’s Original Determination in Sections I and I I (“Domestic L

ike Product” and “Conditions of Competition”) and the dissenting views of Commissioner Koplan. The Commission appealed the court’s decision in Nip pon II . The Court of Appeals for the Federal Circuit held that this court abused its discretion by not returning the case to the Commission for further analysis. Nippon Steel Corp. v. United States , 345 F.3d 1379, 1381 (Fed. Cir. 2003) (“

Nip pon III ”). The Federal Circuit explained that “to the extent that the Court of In ternational Trad

e enga ged in r efinding the fac ts ( e.g. , by determining witness credibility), or interpos ing its ow

n determ inations o n causat

ion and ma

terial in jury itself, [it] . . . exceed

ed its authority.” Id. The Federal Circuit vacated the c ourt’s decision in Nip pon II and remanded the case to the Commission to “attend to all the points made by the Court of I nternational Trade, especially those of

[ Nip pon II ] which the

Commission [ha

d] not y et had the opportuni

ty to address.” Id. at 1382. Therefore, the Commission considered the case on a se cond remand. In its second remand d etermina tion, the Co mmission de

termines that the d

omestic in

dustry was mate rially injured by rea son of Japanese imports. Tin- and Chromium-Coated Steel Sheet from Japan , Inv. No. 731-TA-860 (Feb. 2004) (A.R. 2-263R) [hereinafte r Second Remand Determination ]. 1 Nippon Steel Corporation, NKK Corporation, Kawasaki Steel Corporation, and Toy o Kohan Co., Ltd., (collectively

“Nippon” or “Plaintiffs”), challenge this dete rmination on the grounds that the Commission’s findings of price effects and causation re main unsupported by substantialC OURT N O
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2 Other use s of TCCSS inc lude oil fi lters, snu ff conta iners, bo ttle tops, p aint cont ainers, pails, furniture, aerosol cans, toy s, household utilities, computer applications, film canisters, and bake ware. Final Staff Report at I-6, I I-1 (A.R. 2-145, 2-146) [hereina fter Staff Report ].

3 Domestic

purchas ers have

recent ly b ecome mo re conc entrate d. In 1990, the six large st purchasers accounted for only [ ]% of tin mill consumption. Staff Report at V-6. In 1999, however, they

accounted for nearly

[ ]% of apparent domestic consumption. Id. These six purchas ers have

used this s ignific ant gai

n in marke

t power to

obtain low er pric es from th eir suppliers. Id. at V-7. Whe re nece ssary , the cour

t will ref er to the se purchasers a s follows: Purchase r A is [ ]; Purchaser B is [ ]; Purcha ser C is [ ]; Pur chaser D is [ ]; Purchaser E is [ ]; and Purchaser F is [ ].

4 Due to high transportation costs, most U.S. suppliers maximize shipments east of the Rockies. Id. at II -1, n.1. evidence. For the reasons set forth be low, the Commission’s affirmative material injury determination is remanded with instructions to issue a negative material injury determination. JURISDIC TION AND STA NDARD OF

REVIEW The cour t has juris diction pu

rsuant to 28 U.S.C. § 1 581(c) (2000). Th e court w ill uphold the Commission’s final determination in an antidumping investigation unless it is “unsupported by substantial evidence

on the record, or is otherwise not in accordanc e with law.” 19 U.S.C. § 1516a(b)(1)(B)(i) (2000). OVERVIEW TCCSS is a tin-coated flat-rolled steel product, primarily used in the production of

co nt ai ne rs fo r t he fo od pr oc es si ng in du st ry. 2 The domestic TCCSS industry is character ized by unique conditions of competition. For example, there are a relatively small number of buyers and selle rs: Seven domestic s

uppliers (“suppli ers” or

“produc ers”), two dozen im porters , and six major U.S. purchas ers. 3 In addition, the majority of U.S. suppliers are located in the Eastern and Midweste rn United States an d ty pically supply facilitie s in those a

reas. 4 Althoug

h JapaneseC OURT N O
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5 Over the p erio d of in

vesti gat ion, d omest ic pr oduc ers a ccou nted for a ppro ximate ly

[ ]% of U.S. consumption. Id. In addition, several major purc hasers operate canning facilitie s on the g

rounds of U.S. mills a

nd commit to

buy a minimum vo lume of ste el from those suppliers. Id. suppliers compete more heavily in the West, they supply

purchasers throughout the United States. Id. at II-7, Table

II -1. Non- subject im

ports, on t

he other hand, compete onl

y in the East and Midwest, and during the period of investigation ente red the U.S. market in larger volumes than Japanese imports. Id. at II -7, IV-5. Id. Nonetheless, domestic mills account for the majority of U.S. consumption. 5 Furthermore, TCCSS is almost always sold pursuant to annua l contracts that establish fixed prices and target volumes. Prior to e ntering into a con

tract, however , the majo rity

of purchasers r

equire s uppliers to demonst

rate an ability to make r

eliable deliveries, supply hig

h-quality product and spe cialty items, and provide qua lity service. Id. at II10. These non-price considerations are important fa ctors to TCCSS purchasers. Id. DISCUSSION In the final phase of a

n antidumping duty investiga tion, the Commission determines whether an industry

in the United States is materially injured by reason of the imports under investigation. 19 U.S.C. § 1673d(b). Material injury is defined as “harm which is not inconsequential, immaterial, or unimportant.” 19 U.S.C. § 1677(7)(A). An affirmative ma terial injury determination requir es the Commission to find that the volume, price effects, and impact of the sub ject impor

ts are sig nifican t, and that the material injury was by re ason of the subject imports. Id. § 1677(7) (B); see also Gerald Metals, Inc. v. U nited States , 22 CIT 1009, 1012–13, 27 F. Supp. 2d 1351, 1354–55 (1998) . In this case, the court pre viously upheld the Comm issi on’s d eterm inati on of a small but s ignifi cant v olum e, and Plai ntiff s did not ch allen geC OURT N O
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the Commission’s findings on impact. Nippon I , 182 F. Supp. 2d at 1340. Thus, the court now reviews the Commission’s findings regarding ( I) price ef fects, and (II

) causation. I. Price Effects In e valuatin g the ef fect of subject im

ports on do mestic pr

ices, the Commission mu st consider whether there has been “ significant price underselling by the imported merchandise,” and whether the effect of such imports “other wise depresses prices to a significant deg ree or prevents price increases, which otherw ise would have occurred, to a significa nt degree.” 19 U.S.C. § 1677(7)(C)(ii). In addition, the Commission must evaluate price eff ects within the context of the “conditions of competition that are distinctive to the affected industry .” Id. § 1677(7)(C)(iii). In Nip pon II , the court held that the Commission’s finding of significant price effects was unsupported by substantial evidence. 223 F. Supp. 2d 1351–52. Specifically , the court found that the Commission (A) failed to explain its selection and compilation of price comparison data, (B) did not support its finding of significa nt underselling, (C) ignored evidence contradicting a finding of domestic price depression, and (D) did not consider the industry ’s unique conditions of competition. Id. The Commission addresses these concerns in its Second Remand Determination, however, the record a s a whole continues to demonstrate that subject imports did not have a significant effect on domestic price s. A. Selection and Compilation of Price Comparison Data The Commission has “broad discretion in analy zing and assessing the significance of the evidence on price undercutting.” Copperweld Corp. v. United States , 12 CIT 148, 161 , 682 F. Supp. 552, 5 65 (1988) . It mu st, howev er, “pr ovide a r easonab le explana

tion as to w

hy i t chose the evidence used to support its findings.” Bratsk Aluminum Smelter v. United States , No. 03-C OURT N O
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6 In its Second Remand Determination, the Commission also amended Purchase r B’s pricing data, a portion of which was inadver tently omitted from the Staff Report. Second Remand De

term. at 21. Plaintiffs argue that the Commission erroneously set out Purchaser B’s data and submit their own version. Pl.’s Resp. at 14 n.2. The par ties’ disa greement seem s to stem from how to round the numbers. While the Commission rounds the data to the first decimal point, Plaintiffs round the data to the second. Because this slight discrepa ncy does not af

fect price e ffects or causa

tion anal yse s, the Commi ssion’s c ompilation of Purcha ser B’s

data is reasonable. See Second Re mand Dete

rm. at Revise d Table V -9 (Revis ed); Pl.’s Resp. at Corrected Table V-9 (Revised).

7 Table 3 compares Japanese and U.S. bids by listing the number of Japanese bids and the total volume associ ated with those bids

in the re spective

column: “ Below a

ll U.S. bids, ” “within the range of all U.S. bids,” “above all U.S. bids,” “no c omparable final U.S. bid,” or “initial Japanese bid but no final Japanese bid.” Second Re mand Dete

rm. at 24. 00200, Slip Op. 04-75 at 10 (Ct. Int’l Trade June 22, 2004). I n Nip pon II , the court held that the Commission failed to provide a reasonable explanation as to why it (1) separated out Purchaser A’s diff erent f acilitie s and prod

uct ty pes, (2)consider

ed only bids that u

ltimately culminate d in final sales, and (3) analy

zed underselling data for only 1999. 1. Consider

ing Purc haser A’ s Data Sepa rately The court previously

held that the Commission failed to explain its decision to keep Purchaser A’s separate fac ilities and product types in disag gregated form. Nip pon II , 223 F. Supp. 2d at 1355. As a result, the Commission now calculates a single agg regate unit price for Purchase r A’s fa cilities a nd products and the

n include s that data

in its pric e compar

ison table s. 6 Plaintiff s challe nge the Commission’ s agg

regat ion of this d

ata with r espect t o the bid a

nd volume comparison table, Table Second Remand 3 (“Table 3”). 7 Plaintiffs point out that after the Commission aggregated Purchase r A’s data, the number of subject underselling bids dec reased but the volumes associated with those bids increased. Pl.’s Resp. at 4. Therefore, Plaintiffs argue that the Commission must have incorrectly calculated or erroneously listed volumesC OURT N O
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8 In particular, the total volume of Japanese bids “below all U.S. bids” in the Commission’s First Remand Determination was [ ]. First Remand Dete rm. at 1 0. In Table 3, however, that number increased to [ ]. Second Re mand Dete

rm. at 2 4. In addition, the total Japanese volume associated with bids “above all U.S. bids” in the earlier determination was [ ], but [ ] in Table 3. Although the Commission used Purchaser B’s amended pricing data in Table 3, it does not attribute this volume discrepancy to Purc haser B’s new data. associated with these underselling bids. Id. The Commiss ion responds that it a ccurat ely
prepar ed Table 3 by aggr egatin g the pu rchase r’s data , and listin

g the av erage

annual Jap anese bids, and the volumes associated with those bids, in the appropriate column. ITC Re ply at 5. The Commission fails to address why aggregation of Purchaser A’s data altered Table 3’s total volume calculation. 8 Although the Commission notes that the actual number of bids decreased due to agg

regation, it fails to explain why the volumes a ssociated with low bids increased, while those with high bids decrease d. Indeed, the Commission’s assertion that “conce rns over over-r eprese ntation a rise only with resp ect to the

number of

bids, and n

ot with respect to the volume of sales won by the Japanese suppliers,” seems to suggest that aggregation would not alter total volume calculations. Second Re mand Dete

rm. at 24 n.97. Because the Commission h as faile d to explain this volume

discrep ancy

in Table 3 , it is unre asonable for it to rely on this data in its underselling analysis. See infra

n.13. 2. Considering Only Bids Resulting in Final Sales
In a ddition, th e court previousl y he ld that the

Commission’ s conside

ration of only those bids that ultimately resulted in final sales might g ive skewed results. Nip pon II , 223 F. Supp. 2d at 1355. T

he Commission now expla ins that considera

tion of onl

y f inal bids w

ill not lea d to skewed results because only three purchasers submitted initial bid data, and even those wereC OURT N O
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9 Nonetheless, the Commission considers these initial bids in Table Second Remand 2 (simple averages) and in Table Sec ond Remand 3 (bid and volume comparison). Second Remand De

term. at 20, 24.

10 Alth ough P laint iffs c halle nge the Comm issi on’s u se of t his we ighted average underselling data on the grounds that it ignore s the fact that some purchasers actually increased their domestic volume even though Japanese prices decr eased, the Commission compares purchaser pricing and volume data e lsewhere in its determination. See Second Re mand Dete

rm. at Revised Table TCCSS-1. superse ded by

final bids

. 9 In addition, the Commission explains that it is long-standing Commission practice to rely on weig hted averaging data to a ssess underselling margins, and weighted averaging

—which gives greater pr

ominence to higher volume sales, and thus requires that prices have some associated volume—cannot evalua te initial bids that were not awarded any volume. Becau se the Comm

ission pro vides re asonable explanations for its c onsidera tion of onl

y final bids and its reliance on weighted avera ge pricing data to assess underselling margins, the court uph olds the Com

mission’s u se of the se method ologies

. 10 See Nucor Corp. v. United States , 318 F. Supp . 2d 12 07, 12 57 (Ct . Int’l T rade 20 04) (q uoti ng Mitsubishi Elec. Corp. v. United States , 12 CIT 1025, 1050, 700 F. Supp. 538, 558 (1988)) (holding tha t it is within the Commission’s “discretion to select a particular methodology and as long as substantial evidence supports t hat choic e, the [c]ou

rt revie wing suc h methodol ogy

will sustai

n the [ag ency ’s] decision”). 3. Analyzing Underselling Data for Only 1999 The court also held that the Commission had dispensed with the use of a trend analy sis of underselling data, and was instead rely ing only on evide

nce of underselling in 1999. Nip pon II ,C OURT N O
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223 F. Supp. 2d at 1355. The court found that this focus on underselling data for only 1999 was inconsistent with the Commission’s analysis of volume trends and domestic pricing patterns for the entire period of investigation. See id. (“the Com mission may

not rely , as it has done in thi s case, on trends in subject import market share and domestic pricing to substantiate the significance of its one-y

ear data on underselling”). As a result, the Commission now relies on weight ed aver age pr icing a nd bid comp arison da

ta in its Sec ond Reman

d Determ ination to support its

finding of a tre nd of sig nifican t underse lling. Th erefor

e, contr ary to Plaintif

fs’ assertion, the Commission addresses the court’s concern by assessing underselling trends over the period of investigation. See discussion infra at Section I.B.1. B. Significanc e of Unders elling The statute requires the Commission to determine whether “there has be en significant price underselling by

the imported merchandise as compared with the price of domestic like produ cts . . .” 19 U .S.C . § 167 7(7)(C )(ii) (I). In dete rmini ng the s ignifi cance o f unde rsell ing, “[i]t is within the Commission’s discretion to make reasonable interpretations of the evidence . . .” Maine Potato v. United States , 9 CIT 293, 300, 613 F. Supp. 1237, 1244 (1985). It must, however, “articula te a ‘rational connection between the fa cts found and the choice made.’” Bowman Transp. Inc . v. Arkansas-Best Freig ht System, I

nc. , 419 U.S. 281, 285 (1974) (quot ing Burlington Truck L ines v. United States , 371 U.S. 156, 168 (1962)). In this case, the Comm issi on fai ls to artic ulate a rati onal c onnec tion betwe en the record evide nce and its f indi ngs with regards to underselling. I n particular, its findings that (1) there was a tre nd of increased underselling over the period of investiga tion, (2) underselling was significant in 1999, and (3)C OURT N O
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11 Purc hase

r B’ s mar gins incr ease d: [ ], and Purchaser E’s margins increased: [ ]. Second Re

mand Dete

rm. at 19.

12 Purc hase

r D’s margins de crea sed: []. Simi larl y, [ ] margins

decrea sed: [ ]. Purc haser A ’s data shows a mixe d pat

tern of un ders ellin

g an d oversel ling : [ ]. [ ] da ta al so sho ws a m

ixed p attern: [ ]. And Purchasers C and F only list underselling margins for 1999. Id. underselling margins were not attributable to the domestic industry’s lead time adva ntage, are not supported by substantial evidenc e.

1. The ITC’s Finding of a Trend of Increased Underselling is not Supported by Substantial Evidence As discuss ed above , the Commis sion relie s on weig hted ave rage p ricing and bid comparison data to support its finding that there was a trend of sig nificant underselling over the period of investigation. Neither of these data, howe ver, supports the Commission’s conclusion. First, th e Commission

contends that the w eighte d avera

ge unde rselling data in Ta

ble Second Remand 1 shows increasing levels of subject underselling over the period of investigation. In fact, only two purchasers listed in that table experienced widening unde rselling margins over the period of investigation. 11 Two other purchasers experienced dec reasing margins, two had mixed patterns of underselling and overse lling, and two only re ported data for 1999. 12 Two purchasers’ data out of eight is not substantial evidenc e of a trend of increased underselling over the period of investiga tion. Second, t he Commission assert s that Tab le 3 (a bi d and volu me compa

rison) sh ows a pattern of increased underbidding ove r the period of investigation. Table 3 revea ls that the number of Japanese bids “below all U.S. bids” increased from 1997 to 1999, but decr eased from 1999 to 2000. Second Re mand Dete

rm. at 24. The Table also shows that in 1997 and 1998 thereC OURT N O
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13 In 1997, there were

[ ] Japanese bids below, [ ] within the range of, and [ ] without a comparable U.S. bid. Id. In 1998, there were [ ] Japanese bids below, [ ] within the range of, and [ ] without a comparable U.S. bid. Id. In 1999, there were [ ] Japanese b ids below, [ ] within the r ange o f, and [ ] with out a comp arable U.S. bid. Id. In 2000, there were [ ] Japanese bids below, and [ ] within the range of all U.S. bids. Id. Althoug h the Commis sion also r

elies on the volume l isted in Ta ble 3 to support its finding, it fails to explain discrepancies in this data. See discussion supra Section I.A.1. As a result, the court will not addre ss the Commission’s arguments in this regard. were more Japanese bids “within the range of all U.S. bids” than “below all U.S. bids.” 13 Therefore, Table 3 does not support the Commission’s finding of a tre nd of increased underbidding over the period of investigation.

2. The ITC’ s Finding of Sig nificant Unde rselling in 1 999 is not Suppo rted by Substantial Evidence
In its First Remand Determination, the Commission focused its underselling analysis on the margins of several larg e purchasers in 1999, the only year in whic

h it found generally

lower Japanese prices. First Remand Dete rm. at 12–13. Specifically, the Commission evaluated
response s to Questi on IV -8, in whic h purcha sers esti

mated the price di ffere

ntial that would induce them to switch suppliers, and found that 1999 underselling marg ins were “generally near or at the ranges found by

responding purchasers to be signific ant. . . .” Id. The court held that the Commission’s finding was unsupported by substantial evidence because the wording of Question I V-8 was not relevant to underselling, and the Commission ignore d explanat

ory response s and indiv

idual pur chasing histories in assess ing purc

hasers’ estimates of price differentials. Nip pon II , 223 F. Supp. 2d at 1351. In its Second Remand Determination, although the Commission provides a reasonable explanation for its continuing reliance on Question IV- 8 in assessing determinative price differe ntials, its conclusion that underselling margins in 1999 were sig nificant remains unsupported by substantial evidence.C OURT N O
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14 The Commission attributes the lack of response to various problems, including that some purchaser representatives no long er worked at the companies, some never r esponded to the Commission’s inquires, and some no longer kept information from that time period. Id. at 3–4.

a. The ITC’s Continuing Reliance on Question IV-8 for some Purpose s is Reason able Question IV-8 asked purc hasers to estimate “during 1999, approximately how much higher would the price for the imported product have to have been before [they ] would have purchased U.S.-produced [TCCSS] instead.” Purchaser Questionnaires at I V-8. The court noted that this question was not phrased to illicit responses relevant to underselling, and proposed that a better question would ask purchasers “how much lower [subject] prices would have to be before [they] would switch from a dome stic to a Japanese producer.” Nip pon II , 223 F. Supp. 2d at 1357 (emphasis in original). In response to the court’s c oncern, the Commission reopened the record on remand a nd asked purchasers a rephrase d question. Noti ce and S chedu ling o f Rema nd Pro ceedin gs , 69 Fed. Reg. 236 1 (Jan. 15, 2 004). The Commission a sked purc

hasers “ whether [they were] wil ling to pay more f

or TCCSS from one source versus the other during the [period of investiga tion];” and “if yes, how muc

h more . . . and for what reason or rea sons . . . .” Memo from De Filippo to the Commission (Jan . 23, 2 004), (A.R. 2-262 R), at 3, ITC Ap p., Ta b 17, a t 3. Th is qu estio ning, however , failed

to gene rate an y su bstantive response s. 14 Althoug h Plaintiff

s argue that this r

ephrase d question , like the origina l, does not

address how much lower subject merchandise would have to be to induce purchasers to switch from domestic s

uppliers , it is unlike ly that any question would have

gener ated subs tantive r

esponses , considering that the relevant information is four y ears old. As a result, it is not unreasonable forC OURT N O
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the Commission to continue to rely on responses to Question I V-8 to assess purchaser estimates of price differentials in 1999. See 19 U.S.C. § 1 677e(a) (1) (au thorizing the Commissi on to rely on facts otherwise available when nece ssary information is missing fr om the record). The Commission also points out that the court in Acciai Speciali Terni, S.p.A. v. United States , 19 CIT 1051, 1059 (1995), found that purchase r responses to an almost identical question were releva nt to asse ssing the

importanc e of pric e diffe rentials betwee n subject and domes tic mercha ndise on pu

rchase decision s in the mar

ket. Be cause th e Commission was unab le to obta

in more relevant information, and because the Commission’s reliance on a similar question was previous ly u

pheld by this cour t, the Commis sion’s co ntinued r eliance on Question IV- 8 for some purposes is reasonable.

b. Responses to Question IV-8 do not show that Underselling Margins in 1 999 were Si gnificant Purchaser responses to Question I V-8 varied. Six purchasers provided a numerical estimate of the price differential at which they would switch suppliers, one gave an estimate of zero, and three gave explanatory responses indicating that price was not their most important purchas ing con siderati on. Base d on the nu merical response s, the Commi ssion der ived an ov erall range—two to six percent—of a price differential that would induce a switch of suppliers for 1999, and concluded that underselling marg ins were generally within this range and therefore significant. First Remand Dete rm. at 12–13. The court in Nip pon II , howeve r, critic ized this finding because the Commission ignored explanatory responses giving context to purchaser estimates, and failed to determine the extent to which purchasers’ numer ical responses were actually borne

out by individual purchasing history. Nip pon II , 223 F. Supp. 2d at 1351.C OURT N O
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15 [ ].

16 [ ].

17 [ ].

18 The Commission discusses, at length, other statements suggesting tha t these purchasers consider ed price to be an im

portant p urchasi ng cons ideration. Beca

use the Co mmission fa

ils to establish how these

other sta tements, u

nlike pur chaser response s to Questi on IV -8, rela te to determinative price differentials in 1999, they are not relevant here. Never theless, all of the statements are discussed below. See discussion infra Sec ti on II. i. Explanato ry Respons es Purchasers B, D, and A provided explanatory responses to Question IV-8 sug gesting that they did not switch suppliers in 1999 based on price

. See Purchaser B Questionnaire Resp. 15 (stating that it “[chose] steel suppliers based on 1) quality , 2) service, and 3) price, in that order of importa

nce . . . u nique man

ufactur ing cap abilities

of some of

f-shore sources drive us t

o purchas e from the

m irrespe ctive of

their pri ces whic

h, in most c ases, ar

e highe r than U. S. produce r price s”); Purchaser D Questionnaire Resp. 16 (stating that it “di d not sele ct the Japa nese [suppliers ] based on price, bu t on quality

perfor mance, a nd the[] abil ity t

o demonstr

ate this quality to domestic

supplier s, there

by proving t

hat [Purch aser D’ s] expectat ions for q uality could be achie ved”); Purchaser A Questionnaire Resp. 17 (stating that “pricing is not the main factor. [Purchase r A] is deve loping long-ter m global partners that hav e lowest c ost and hig hest perfor mance. T his decis ion can be

more ge ograp hical dr

iven than price dr iven.”) . Nonethe less, the Commission concludes that these explanatory response s do not undermine its finding of significant underselling in 1999 because other record evidence shows that these purcha sers consider ed price to be an im

portant f actor in their pur chasing decision s. 18 Even without consider ation of these expla

natory response s, howeve

r, the Comm

ission fai ls to point toC OURT N O
. 00-09- 00479 P AGE 16

19 In 1998, Purchaser B bought [ ] of Japanese TCCSS at a discount rate of [ ]%, and [ ] of U.S. TCCSS at a discount rate of [ ]%. In 1999, Purchaser B bought [ ] of Japanese TCCSS at a discount rate of [ ]%, and [ ] of U.S. TCCSS at a discount rate of [ ]%. Second Re mand Dete

rm. at Revised Table TCCSS-1. Therefore, Purchaser B c ontinued to buy [ ]% of its TCCSS from U.S. suppli ers in 199 9. The ma rgin of underse lling wa s [ ]% in 1998, a nd [ ]% in 1999. Id. at 19, Table Secon d Rema nd 1. T his wa s the n arrowe st mar gin of a ll th e large purchasers in 1999. substantial evidence that Purchaser B, D, or A c onsidered the margin at which they bought subject imports in 1999 to be significant. First, the Commission contends that Purchaser B’s purchasing history shows a correlation between underselling margins a nd purchasing decisions. Second Re mand Dete

rm. at 39. The Commission notes that in 1999, Purchaser B increased its purchases of Japanese imports at the
same t ime pr ices d ecreas ed. A s impl e corre lati on bet ween un dersel ling an d purc hasin g, however, is insufficient to establish that underselling marg ins were significant. See Nippon I , 182 F. Supp. 2d at 1342 (“a rapid rate of increa se nonetheless may be immaterial if, for example, the margin never goes a

bove a price differential that would cause pur chasers to change suppliers
to an y significant

degre e”) (e

mphasis a dded). I n fact, n otwithsta nding low er Japane se price s in 1999, Purc

haser B continue d to obtain the vast ma

jority of its TCCSS f

rom U.S. su

ppliers. 19 Theref ore, 1 999 un dersel ling m argins were no t to s uch an exte nt to indu ce Pur chaser B to cha nge suppliers to any signific ant degree. This evidence shows that Purc haser B did not consider 1999 margins to be significant. Second, the Commission asserts that Purchaser D’s purchasing patterns show tha t price was an imp ortant pa

rt of its pu

rchasin g decis ions beca

use it pur chased s ubject me rchandi se in 1999 at a price that was significantly lower than the lowest domestic bid. Second RemandC OURT N O
. 00-09- 00479 P AGE 17

20 In 1998, Purchaser D purc hased only domestic TCCSS—[ ] at a price of $[ ]. Second Re mand Dete

rm. at Revised Table TCCSS-1. In 1999, Purchaser D purchas ed [ ] Japanes e TCCSS at a price of $[ ] and [ ] domes tic TCCSS at $[ ]. Id. This was an underselling margin of [ ]%. Id. at 19, Table Second Remand 1.

21 In 1998, Purchaser A boug ht [ ] of domestic TCCSS at a price of $[ ], and [ ] of Japanese TCCSS at a price of $[ ]. Id. In 19 99, it purchased [ ] of domestic TCCSS at a price of $[ ] and [ ] of Japanese TCCSS at a price of $[ ]. Id. The marg in of unde

rselling narrow ed from [ ]% in 1998 to [ ]% in 1999. Id. at 19, Table Second Remand 1. Determ. at 32. Plai

ntiffs ar gue tha t Purchas er D’s pu

rchasin g histor y shows an inc

rease i n purchases from domestic suppliers over the period of investig ation. Pl.’s Resp. at 8. The issue is whether Japanese underse lling mar

gins in 19 99 were

signific ant. I

n 1999, Pur

chaser D paid approximately $70 less for Japanese imports than for U .S. merchandise. 20 Notwithsta nding thi s price difference, howeve

r, Purchaser D obtained nearly ninety-nine per

cent of its TCCSS from U.S. suppliers that year. See id. at Revise d Table T CCSS-1. Simila r to Purch aser B ’s data, this evidence indicates that Japanese underselling wa s not significant enough to induce Purchaser D to substantially switch suppliers in 1999. I t shows that Purchaser D did not consider 1999 underselling margins to be significa nt. Third, the Commission a sserts tha

t Purchas er A con sidered

1999 unde

rselling margin s to be signi ficant b ecause

it bought more TCCSS f

rom domes tic supplie

rs that y ear in r esponse t o narrowing underselling marg ins. Plaintiffs argue that the purchasing history contradicts the Commission’ s underse lling analy sis. From 1998 to 199 9, althoug

h Japanese

prices f ell and U. S. prices r ose, Purc haser A bought le ss Japanes e merch andise a nd more U .S. produc

t. 21 Contrary

to the Commissi on asser

tion, this pu

rchasin g data i ndicate s that Purc

haser A shifted v olume inC OURT N O
. 00-09- 00479 P AGE 18

22 See Purc hase

r Que stion

nair e Res ponse s at I

V-8 [

].

23 The c orre spond

ing u nder selli ng ma rgin s for 1999 w ere a s foll ows: [ ]. Second Re

mand Dete

rm. at 19, Table Second Remand 1. Therefore, the underselling mar gins for Purchasers E and F fe ll within their reported determinative price differentials. 1999 f or reas ons ot her th an pri ce. It doe s not suppo rt a fi ndin g of sign ifica nt un dersel ling that year. Theref ore, notw ithstandin g the expl anatory

response s, purcha sing hist ories sho w that Purchase rs B, D, a nd A did not

consider the pric e at whic

h Japanese

imports und

ersold do mestic TCCSS in 1999 t

o be sign ificant. ii. Nume rical Est

imate s Six purchas ers res

ponded to Question I

V-8 with n

umerica l price d iffere ntials. 22 Of these six, the unde

rselling margin s for two p

urchase rs fell within their

estimate d price d

iffere ntials, indicatin g that th ey

consider ed the ma rgin at which the

y pu rchase d Japanese

imports in 1 999 to be signi ficant. 23 Two supportive responses out of nine is not substantial evidence showing that 1999 underselling margins were sig nificant. Rather, it indicates the opposite. 3. The ITC F ails to Subst antially Suppo rt its F inding that P remium s Paid for Superior Domestic Lead Times were Minimize d by other Factors Evidence of underselling has been f ound to be less significant where there ar e price premiums for superior domestic lead times. See Committee for Fair Beam I mports v. UnitedC OURT N O
. 00-09- 00479 P AGE 19

States , No. 02-00531, Slip Op. 03-73 at 14 (Ct. Int’l Trade June 27, 2003) (noting tha t “the ITC may discount incidence s of underselling on account of [a] price premium, where appropriate, as this price premium mi

tigate s underse lling tha

t is observ ed”); Timkin Co. v. United States , 20 CIT 76, 87–88, 913 F. Supp. 580, 589–90 (1996) (discussing how I TC “concluded that factoring in the price premium for domestic [products] made the relatively small margins of underselling even les s signif

icant”) ; Trent Tube Div., Crucible Materials Corp. v. United States , 14 CIT 386, 402, 741 F. Supp. 921, 935 (1990) (according less weig ht to consistent underselling based on domestic p

rice pr emium due

to custome

r prefe rences and lead time diff erence s); Roses, Inc. v. United States , 13 CIT 662, 665–66, 720 F. Supp. 180, 183 (1989) ( finding 62 out of 110 instances of underselling insignificant beca use price premiums for locally -grown roses based on freshness and an ability

to supply the flowers on a shor t-term need basis).
In Nippon I , the court held that the Commission failed to analyze whe ther the undisputed lead-tim e advan

tage he ld by

the domes tic industr

y tr anslate d into pric e premiu ms over imp orts, and accounted for the margin of overselling. 182 F. Supp. 2d at 1342. In its F irst Remand Determination, the C ommission responded that although the domestic lead time advantage “ can give purchasers more flexibility in modifying their purc

hase orders on shorter notice, which can translate into a price premium,” it was diminished by other factors, and thus not responsible for underselling margins. First Remand Dete rm. at 13. The court held, however, that even if the price premium were somewhat diminished, it “may still eclipse the underselling margin.” Nip pon II , 223 F. Su

pp. 2d at 1 360. Without

assessin g the exte nt of the price pr

emium in relation to underselling margins, the court held that the Commission’s findings we re unsupported by substantial evidence

. Id.C OURT N O
. 00-09- 00479 P AGE 20

24 The Commission asked purchasers “whether [they were] willing to pay

more for TCCSS from one source versus the other during the [period of investiga tion];” and “if yes, how much more . . . and for what reason or rea sons . . . .” Memo from DeFilippo to Commission at 3.

25 The Commission also contends that since the original record does not contain evidenc e of a spec ific and

consiste nt premium , it must not e xist. In its First Re

mand Dete

rmination , in contrast, the Commission cited purchaser testimony sug gesting otherwise: “Japanese imports . . . have historically be en priced lower than U.S. supplies because of the fle xibility U.S. can makers must give up when they

use imported product.” First Remand Dete rm. at 13 n.37 (quoting Conference Tr. at 70).

26 Contr ary to the Commis sion’ s asse

rtion , neither

Purc hase r B nor [ ] Questionnaire Responses are supportive of its conclusion. See Purchaser B Questionnaire Resp. at IV

(noting that “fo reign m

ills” have unique ca

pabilitie s); [ ] (responding that Japanese TCCSS has superior quality and U.S. produc ers have consistent supply a nd a lead time advantage). In response to the court’s c oncerns, the Commission reopened the record on its second remand t o obtain a dditional i

nformati on reg arding

the existen

ce and si ze of any

such pre mium. 24 As discussed above, however, it was unsuccessful in obtaining any substantive response s. See discussion supra

Section I.B.2.a. As a r

esult, the Commission continues to rely on the origina l recor d to suppor

t its findin

g that a premium, i f it did exist, was offs et by premiums p aid for supe rior Japanese qual ity or other f actors. 25 Second Re

mand Dete

rm. at 50–56. Plaintiffs argue that the Commission again fails to assess the price pr emium in relation to underselling margins. Pl.’s Resp. at 14. Without evidence of the extent or size of price premiums, the Commission has no support for its be lief that

premiums p aid for f

aster do mestic le ad times w ere minim ized by premiums paid for superior Japanese quality or other factors, and thus did not translate into underselling margin s. 26 An affirmative determination cannot be supported by speculation. The Commission may rely on the less than perfect available information, but it must be actual information.C OURT N O
. 00-09- 00479 P AGE 21

C. Dom estic P rice Depression or Suppression An af firm ative injur y d eter minat ion a lso re quire s a fi

nding that s ubje ct imp orts “ depr

ess[] prices to a significant degre e or prevent[] price increases, which otherwise would ha ve occurred, to a significant degree.”

19 U.S.C. § 1677(7)(C)(ii)(II ). The Commission here bases its finding of domest ic price depress ion and sup

pression on the fol lowing e

vidence : (1) The

domestic industry ’s cost-p

rice squeeze, (2 ) a lost sa le alleg ation, an

d (3) pur chaser pricing data. Th is evidence, however, does not substantially support the Commission’s finding of significant price depression or suppression.

1. The ITC’s Cost-Price Squeeze Analysis does not Substantially Support a Finding of P rice Depression or Suppression An industry is in a cost-price squeeze situation if it is unable to raise prices to cover the cost of g oods sold. H ere, the Commission f

inds that th e domestic

industry experien ced a co stprice sq ueeze ove r the per iod of inve stigation becau se the ind ustry ’s overa

ll cost of goods sold increased in relation to its net sales. Second Re mand Dete

rm. at 26–27. Plaintiff

s challe nge this finding on the g rounds tha

t the two do mestic mill s that comp ete most di rectly with Japane se imports reported positive operating margins during the period of investigation. Pl.’s Resp. at 6. Evidence of a cost-price squeeze g enerally suppor ts a finding of domestic price suppression. See Gerald Metals, Inc. , 22 CIT at 1023, 27 F. Supp. 2d at 1362 (discussing how a n ITC Commissioner could not find “clear evidenc e of a cost-price squeeze, [and thus] conclude[d] th at p ric e su ppr ess io n co ul d no t b e at tri but ed t o t he LT FV i mp ort s t o a s ign ifi can t d egr ee” ). In this case , howeve

r, beca use of the particu lar cond itions of c ompetition , the cour t previou sly instructed the Commission to assess individual purchaser data to determine whether a cor relation between subject imports and domestic pricing existed. Nippon I , 182 F. Supp. 2d at 1344.C OURT N O
. 00-09- 00479 P AGE 22

27 Although some domestic producers reported positive opera ting margins during the period of investigation, the record shows that the industry ’s overall cost of goods sold increased in relati on to its net sales va lues over the peri od and uni

t sales de clined. T

he cost of goods so ld in rela tion t o net sale s valu

es thr oughout th e per

iod wa s as f

ollow s: [ ]. Staff Report

at VI-2, Table VI -1. Unit s alesdecl ined

from [ ]. Id. at VI-3, Table VI -2. Therefore, although the rec ord shows that the domestic industry g enerally ma y have be en experiencing a cost-price squeeze, 27 the Commission’s finding of a correlation between subject import pricing and U.S. pricing must be supported by individual pricing data. Id. ; see also Altx, Inc. v. United States , No. 00-0 8-00477, Slip Op. 02- 65 at 43 (C t. Int ’l Trade July 1 2, 2002) ( “It i s true that the Commission need not find an exact correlation between subject import pricing and domestic pricing. Nevertheless, the Commission’s cursory look at general net declines over the POI is insufficient.”).

2. The ITC’s Reliance on a Lost Sale Allegation is Improper The Commiss ion also f

inds that e

vidence of a lost sa

le indica tes that th e domestic industry’s prices we

re suppressed. A lost sales allegation refe rs to the situation in which the domestic industry is unable to make a sa le because of the presence of lower priced imports. Copperweld Corp. , 12 CI T at 169 n. 15, 682 F. Supp. at 57 2 n.15. Alt hough e vidence of a lost sale may be pr

obative of price suppression, the lack of such evidenc e ordinarily will not vitiate a Commission’s determination. USX Corp. v. United States , 11 CIT 82, 86, 655 F. Supp. 487, 491 (1987). Wh ere the

Commission c

hooses to r

ely on finding s of lost sa

les, howe ver, it mus t support such findings with substantial evidence. Nip pon II , 223 F. Supp. 2d at 1364–65.
In Nip pon II , the cour

t held tha t the Commiss ion improp erly relied o n the lost sa

le allega tion beca use it was unsuppor ted by the rec ord and u

ndermine d by

evidenc e that the

saleC OURT N O
. 00-09- 00479 P AGE 23

28 [ ] alleges that it lost a $[ ] million sale to Purchaser A—a bid of $[ ] for [ ] short tons of TCCSS. Staff Report at V-23, Table V-14.

29 Plaintiffs suggest that Purchaser A’s 1999 data is the pr oper place to find the alleged lost sale because the bid was allegedly made in October 1998. Pl.’s Resp. at 23. Be cause Purchase r A’s fis cal y

ear 2000 covers t he perio d from Ma

y 19 99 to April

2000, how ever, it

is reasonable for the Commission to assume that a bid made in October 1998 would cover shipments made in calendar y ear 1999. Staff Report

at V-16, Table V- 4. Noneth eless, th e lost sale is not reflected in Purchaser A’s 1999 or 2000 data

.

30 [ ] reported that it lost a bid for [ ] short tons of TCCSS in 2000, but Purchaser A bought [ ] short tons of Japanese TCCSS that year, [ ] of which (continued...) was lost for non-price reasons. Id. at 1352. In its Second Remand Determination, the Commission again cites this lost sale allegation as evidence of domestic price suppression. Second Re

mand Dete

rm. at 81. Plaintiffs argue that the lost sale is unsupported by substantial evidence. Pl.’s Resp. at 23. Because the record ( a) does not correspond with the volume and pricing data of t his alleg ed lost sa

le, and ( b) indica tes that th e lost sale , if it did oc cur, wa s due to non-price reasons, the Commission’s reliance on this lost sale is improper.

a. Purc haser A’ s Data doe s not Support the Alleg ed Lost Sale The lost sale at issue involves an allegation by a particular domestic producer, claiming that it lost a sale in October 1998 to Purchaser A because of a lower Japanese bid. 28 On its second remand, the Commission finds that the lost sales allegation is confirmed by Purchaser A’s 2000 record data. Second Re mand Dete

rm. at 81. Plaintiffs correctly point out, however, that the lost sales allegation is not reflected in Purchaser A’ s volume or pricing data. 29 Fir st , P urc has er A ’s v ol um e da ta d oes not cor res pon d t o t hat of t he a ll ege d l ost sal e. In 2000, Purchaser A bought approximately 6,000 short tons more of Japanese TCCSS than was al le ge d l os t b y th e U .S . p ur ch as er at th e r el ev an t f ac il it y. 30 Contrary to the Commission’sC OURT N O
. 00-09- 00479 P AGE 24

30 (...continued) was at its [ ] facility. Staff Report at V-1 2–V-1 6, Tab le V-4 a–V-4c . Alt hough the Commissi on cites d

ata fro m both Purc

haser A ’s [ ] facili ties in an attempt to verify the

allegation, it argued in its First Remand Deter mination that the sale was lost at Purchaser A’s [ ] facility. Neither facility’s data, how ever, supports the allegation.

31 In 2000, [ ] made

a bid of $[ ] a

t Purc hase r A’s [ ] facility, which does not c orrespond to the alleged $[ ] lost bid. Id. at V-13, Table V-4a.

32 In 2000, [ ] made a bid of $[ ] at Purchaser A’s [ ] facility

. Purchaser A accepted that bid and boug ht [ ] tons of TCCSS at that price. Staff Report at V-14, Table V-4b. assertion, these volumes are not “fully consistent.” Second, Purchaser A’s pricing da ta does not correspond to that of the lost sale. The Commission concedes that the U.S. producer’s bid at the relevant facility

was “well above” the allege d price per ton. 31 Second Re mand Dete

rm. at 83. As a result, it alternatively

points to a

bid that the

U.S. produ

cer mad e at a dif ferent facility , which is closer in price to the one allegedly lost. Id. The Commission fails to note that rather than losing that bid, the U.S. producer was awarded that sale. 32 The record simply does not support the volume and price values of the alleged lost sale.

b. Purchaser A’s Comm ents Undermine the Commission’s Finding that the Lost Sale was due to Lower Japanese Prices Apparently be cause the record does not support the alleg ed lost sale, the Commission emphasizes the fact that Purchaser A agr eed with the allegation. Although Purchaser A agreed with the lost sale allegation, the court in Nip pon II held that other statements by Purc haser A indicated that the sale was lost because of non-price reasons. 223 F. Supp. 2d at 1365–66. Specifically, the c ourt noted that Purchaser A (1) emphasized non-price fa ctors when agreeing with the lo st sale al legati on, (2) te stified th at it had long-ter m commitmen

ts with its Jap aneseC OURT N O
. 00-09- 00479 P AGE 25

33 “In [ ], we had a differe nt compet itive dy namic. Th e Japanes e mills . . . have long been our dominant suppliers at this location, reflecting the ease of shipping steel from Japan

to the wes t coast. [ ] wa s able to p ick up a su bstantial portion of

our busine ss at [ ] [in 1998] because [it] accepted our invitation to deepen the supplier relationship and discuss multi-year supply commitments. We currently have a [ ] year contract with [it] . . . . We also have been working with [ ] to develop new products . . . . Since [Purchaser A] was willing to deepen its commitment to [ ] as a long term purchaser, [ ] was willing to offer more attractive prices to reflec t that larger volume commitment. Note that much of [ ] gain came from our other Japanese supplier . . . .” Purchaser A Questionnaire Resp. , Decl. of [ ], at 5. supplier at the re levant f

acility, and (3)noted tha

t the par ticular U .S. produc er did not bid seriously for its West Coast business. Id. Althoug h the Commis sion asse

rts other wise, the se
statemen ts continue to show that if the s ale was l ost, it was because of non-pr

ice factors. First, when Purch aser A a greed with the lo st sale al legati on, it emph asized tha t “price is not the only factor in c ontract selection; quality a nd delivery time ar

e also critical, and whether the firm can supply g

lobally.” Staff Report

at V-25. The Commission interprets this statement to mean th at Purcha ser A co nsidere d price t o be a sig nifican t factor in its purc

hasing d ecisions , and as a result, the sale was lost to lower priced Japanese imports. Second Re mand Dete

rm. at 86. The Co mmission’s

interpre tation of t his statem ent stret

ches it be yon d recog nition. Rat

her it appears that Purchaser A bought Japanese imports instead of this particular U.S. purchaser’s merchandise because of quality, delivery, and g lobal considerations. Second, Pu

rchase r A noted that it had

long-te rm commitme

nts with its Ja

panese supplier. 33 The Commiss ion arg ues that b ecause

Purchase r A also in

dicated that the Jap anese suppliers were willing to offer more attrac tive prices, the sale was lost because of lower- priced Japanese imports. On the contrary , however, this statement clearly indicates that Purchaser A awarde d Japanese

supplier s with tonna

ge bec ause of d

eepenin g commitments and p lans to develop new products.C OURT N O
. 00-09- 00479 P AGE 26

34 A represe

ntati ve sta ted that “[ ] neve r rea lly bid for [ ] business. The [ ] bid index was always [ ] percent higher than the lowe st bid, and consistently one of the hig hest among the domestic mills. In addition, it has never be en willing t o place a signific ant volume

of steel o n the wes t coast. [ ] ha s historic ally refused to freight equalize – which place s [it] at an impossible competitive disadvantage on the west coast.” Id.

35 Relevant U.S. bids on tin-plate at Purchaser A’s [ ] facility w ere as follows: [ ]. Staff Report

at V-13, Table V-4a. The U.S. supplier similarly over bid other U.S. suppliers for other products at that facility

. See id. at V- 12, Ta ble V -4a [
]. Third, Pur

chaser A stated t

hat the pa rticular U.S. suppli er did not

bid serio usly for its West Coast business, suggesting that the sale would have bee n lost to another domestic supplier in the absence of Japanese competition. 34 The Commission argues that purchasing history shows that the U .S. supplie

r bid cons istently

and compe

titively on Purcha ser A’s b

usiness a t that fac ility through out the pe riod. Purc

haser A ’s purch asing hi story reveal s, howeve

r, that the U.S. supplier’s bids were significantly higher than other U.S. bids, which were ultimately accepted. 35 Purchaser A’s statement as well as its purchasing history do not support the Commission’s conclusi on that the

lost sale w as due to l ower Japa nese pri ces. Therefore, Purchaser A’s state ments undermine the Commission’s finding that the allege d lost sale

was due t

o lower Jap anese pr

ices. 3. Purchaser Pricing Data does not Substantially Support a Finding of Domestic Price

Depression or Suppression In its Final De terminat ion, the Co mmission link ed a ge neral de cline in d

omestic pr

ices to overall underselling trends in Japanese pricing. Final De term. at 15. As discussed above, theC OURT N O
. 00-09- 00479 P AGE 27

36 Although the Commission did not evaluate Purchasers E and F for purposes of determin ing dome stic pric e depre ssion and/ or suppre ssion, the

court not es that the ir pricin

g data supports the conclusion that domestic prices were gene rally depre ssed over the period of investigation. Purchaser E’s pricing data reveals a general incr

ease in discount rates: 1997 - U.S. [ ]%, Japanese [ ]%; 1998 - U.S. [ ]%, J apanese [ ]%; 1999 - U.S. [ ]%, Japanese [ ]%; 2000 - U.S. [ ] %, Japanese [ ]%. Second Re mand Dete

rm. at Revised Table TCCSS-1. Purchaser F’s pricing data similarly

reveals a general incr

ease in discount rates: 1997 - U.S. [ ]%, Japanese [ ]; 1998 - U.S. [ ]%, Japanese [ ]%; 1999 - U.S. [ ]%, Japanese [ ]%; 2000 - [ ]. Id. Further, the estimated price differentials of Purchasers E a nd F fell within the margins at which they bought subject TCCSS in 1999, indicating that those underselling margins were sig nificant. See supra n.23. court he ld that alt

hough th e Commission

is not req uired in a ll cases t o determ ine the r elationsh ip between subject imports and domestic prices on an individual purchaser ba sis, “where the other data is mixed and where data is available to determine whether suc h a correlation existed for particular purchasers, and is relied on by respondents, the Commission must address the individual purchaser data in some manner.” Nippon I , 182 F. Supp. 2d at 1344. Nonethe less, in its First Remand Determination, the Commission failed to do so. Nip pon II , 223 F. Supp. 2d at 1358–59. In its Second Remand Determination, the Commission evaluates the pricing data of four of the six large purchasers and finds a c orrelation between Japanese imports and the price at which they boug

ht domestic TCCSS. Second Re mand Dete

rm. at 42–50. Plaintiffs argue that purchasers’ pricing data re veal no such correlation. Pl.’s Resp. at 13. The four purchasers whose pricing data was evaluated by

the Commission—Purchasers A, C, D , and B— did n ot bu y Japanes e impo rts at signi ficant margin s of un dersel ling. 36 See discussion supra

Section I.B. These four

purchasers apparently

operated to some degree on theC OURT N O
. 00-09- 00479 P AGE 28

37 Purchaser A had facilities in [ ]. Staff Repor t at V -12–

V-16 . Purc

hase r C ap pears to ha

ve ha d loc ation s in [ ]. Purchaser D appears to have had locations in [ ]. Purchaser D Questionnaire Resp. at I-2. And Purc hase r B a ppea rs to have h ad lo cati ons in [ ]. On the other hand, Pur

chas ers E and Fappe ar tohave

had [

]. West Coast. 37 As discussed below, the record as a whole indicates tha t Japanese imports did not have a significant effect on domestic prices over the period of investigation.

a. Purchaser A The court in Nip pon II

held that the Commission failed to explain its finding of significant price depression in light of the fa ct that Purchaser A, which accounted for the bulk of the instan ces of undersel ling, paid i ncreasing domes tic prices b etween 1997 an d 1999. 223 F. Supp. 2d at 1358. In response, the Commission evaluates the pricing data and finds that Purchaser A did not pay

increasing domestic prices throughout the pe riod, and that Purchaser A’s volume levels correlated with Japanese underselling mar gins over the period of investigation. Second Re

mand Dete

rm. at 44. Plaintiffs argue that the pricing data show s that Japanese prices did not affect domestic prices. Pl.’s Resp. at 12. Purchaser A’s pricing data indicate s that U.S. suppliers were able to raise prices notwithsta

nding low er Japane se price s. Specif ically , Purcha ser A pa

id more for domesticC OURT N O
. 00-09- 00479 P AGE 29

38 Becau se of con solidation , Purcha ser A’s pricing data is dif

ferent from that in the First Remand De

terminat ion. None

theless, the pric e at whic

h Purcha ser A bou

ght U.S. T CCSS generally increased: 1997- $[ ]; 1998 - $[ ]; 1999 - $[ ]; 2000 - $[ ]. Revised

Table TCC SS-1. And th e price at which P

urchase r A boug ht Japanes e TCCSS g ener

ally decr ease d: 199 7 - $[ ]; 1998 - $[ ]; 19 99 - $ [ ]; 2000 - $[ ]. Id. TCCSS and less for Japanese TCCSS over the period of investigation. 38 Although the Commission a

rgues t hat Purchaser A b ought hig her volum es of Japa

nese impo rts in res

ponse to lower prices, the issue here is price eff ects. The Commission’s evaluation of volume shifts is not relevant in this context. See Nip pon II , 223 F. Supp. 2d at 1358 n.12 (“[t]he court . . . sustained the Commission’s finding of low but significant subject import volume as an isolated finding and does not revisit the issue, except as it affects the ultimate causation conclusion.”). Ther efore, Purchase r A’s pri cing da

ta shows a

lack of c orrela

tion betwe en subjec

t imports a

nd domesti c prices. b. Purchaser C
In Nip pon II , the cour

t also held

that the Co mmission ha

d not adeq

uately explained

its finding of a correlation between Japanese imports and domestic prices, considering that Purchaser C was able to secure domestic price decreases between 1997 and 1998 without making any subject import purcha ses until 1999. 223 F. Supp. 2d at 1358–59 . The Commission now explains tha

t the link be

tween Japa

nese impo rts and Pur

chaser C’s ability

to secur e domestic price de crease s was Purchaser F. Second Re mand Dete

rm. at 46–47. Because Purchaser F bought Japanese imports in 1998 and was in a purchasing alliance with Purchaser C, the Commission r

easons th at Purcha ser F pr obably shared Ja panese p ricing informat ion withC OURT N O
. 00-09- 00479 P AGE 30

39 A purcha ser representa tive explai

ned how a

lliances work: “[I

negotia te] with the

U.S. mills for [other purchasers] . . . . I would meet with each mill and come to some resolution on pricing . . . . For

all of the alliance member’ s volumes. . . . Once I g ot that don e, I

would ca ll a meeting and inform the members of the alliance w hat the arrangement was for the upcoming year.” Hearing Transcript (June 29, 2000), at 240, (A.R. 1-74), ITC App., Tab 19, at 22 [hereinafter Hr’g Tr. ].

40 Although Plaintiffs also argue that the Commission’s discussion of purchasing allianc es is inconsistent with its findings regarding consolidation, purchasing alliances and consolidation are dif ferent issues. I n addition , Plaintiff

’s arg ument re gardin

g the ef fect of non-subje ct imports is discussed below. See discussion infra Section II.B. Purchase r C. 39 Based on this infor mation, the

Commission f

inds a cor relation betwee n Japanese imports an

d the pric e at whic

h Purcha ser C boug

ht U.S. TCCSS. Plaintiff s argue that this “possible indirec t effect” does no t establis h a corr elation b etween

Japanese imports an

d U.S. prices. 40 Pl.’s Resp. at 13. In the absence of

concrete record evidence , the Commission’s “belief” that Purchaser F “likely” informe d Purchaser C of Japanese pricing does not constitute substantial evidence

. Moreove r, Purcha ser F did

not buy Japanese imports unt

il 1998, an

d report ed that it w as not unti l “late ‘98” when it decided to take advantag e of price variances it observed be tween foreign and domestic mills. Purchaser F Questionnaire Resp. at II -2. Therefore, contrary to the Commission’ s conclus ion, the r ecord f ails to dem

onstrate a conne ction bet

ween Japa

nese imports and the 1997 and 1998 prices Purchaser C paid for domestic TCCSS.

c. Purchaser D In Nip pon II , the court also held that the Commission failed to address why Purchaser D bought more expensive domestic TCCSS between 1999 and 2000, despite lower Japanese prices. 223 F. Supp. 2d at 1359. The Commission responds that this price increase was related to theC OURT N O
. 00-09- 00479 P AGE 31

41 Purchase

r F Memo[ ] (stating that “Weirton’s successful petition with the ITC has halted Japan ese i

mport s [ ]; Purchase

r F Memo[ ] (regarding neg otiation strategies with Nippon for 2000, “Off to a gr eat start in ‘99 only to have Weirton’s petition to the I TC terminate the flow of material for now”); Purchase r B Memo

[ ] (noting

that Purchaser B said it wou ld not plac e busines s with Weirton because of Weirton’s involvement in antidumping proceeding)

. filing of the antidumping petition. Second Re mand Dete

rm. at 49. Plai ntiff

s do no t chal lenge this explanation. Under 19 U.S.C. § 1677(7)(I), the Commission may consider whether any

change in price effec ts since th e filing

of the pe tition is re lated to th e pende ncy of the inv estiga

tion, and i f so, it may reduc e the weight accorded to that data. I n this case, the Commission points to evidence indicatin g that th e filing

of the an tidumping

petition in

October 1999 had a

n effect on domest

ic pricing in 2000. 41 Thus, the Commission’ s decisio n to place less weig ht on data for 2000 i s reasonable. From 199 8 to 1999, the price at which P

urchase r D boug ht domestic

mercha ndise remained stable. The Commission contends that because of the domestic industry ’s cost-price squeeze, this stable pricing indicates that Japanese underselling pr evented domestic price increases that would have otherwise occur red. Second Re

mand Dete

rm. at 48. Plaintiffs argue that nothin

g in the r ecord shows that U .S. supplie rs would h ave rai sed Purchaser D’ s prices in 1999. Pl.’s Resp. at 13. Although Purchaser D paid the same price for domestic TCCSS in 1998 and 1999, it did not buy Japanese imports until 1999. Given the insignificant leve ls of underselling with regard to this purchase r, it is only the gene

ral cost-price squeeze analy sis that could support a finding of price suppression. The pricing to Purchaser D is not supportive.C OURT N O
. 00-09- 00479 P AGE 32

42 Purchaser B’s pricing data in ove r the period of investigation was as follows: 1997 - U.S. [ ]%, Japanese [ ]%; 1998 - U.S. [ ]%, J apanese [ ]%, 1999 - U.S. [ ]%, Japanese [ ]%; 2000 - U.S. [ ]%, Japanese [ ]%. Second Re mand Dete

rm. at Revised Table TCCSS-1. d. Purchaser B Finally, the cour

t in Nip pon II

found that the Commission failed to address Purchaser B’s data. 223 F. Supp. 2d at 1359. The Commiss ion now exa mines the p

ricing data and finds a correlation between Japanese underselling and domestic price depression. Plaintiffs argue that there wa s no corr

elation b ecause

Purchase r B boug ht incre asing vo lumes of d omestic T CCSS over the period of investigation. The issue here, how ever, is price effects. From 1997 to 2000, Purchase r B obta ined wide r U.S. and

Japanese discount r

ates. 42 Although this evidence indicates a correlation between Japanese imports and domestic price depression over the period of investig ation, Pur

chaser B did not c onsider u

ndersel ling mar

gins in 19 99 to be sig

nifican t and th er e w as no t a si gn if

ic an t t re nd of

un de rs el li ng ov er th e p er io d o f i nv es ti ga ti on . C on se qu en tl y, this evidence is problematic. The most that can be said of the pricing data is that it pulls in two directions. Thus, the Commission’ s conclus ion as to pr ice depr ession or suppress ion is only supporte d by

the generalized

sub-conc lusion of a

cost-pr ice sque eze. Neit

her lost sa

les anal ysi s nor particularized pricing data positively correlates with Japanese import pricing. I f the pricing data is viewed in the context of particularized underselling data it supports a neg ative determination. I f viewed in the con

text of the g eneral ized cost- price sq ueeze conclusion i

t is slightly supportive of price suppression. Overall, it is not helpful to the question of price depression or suppression.C OURT N O
. 00-09- 00479 P AGE 33

D. Conditions of Competition The mate rial injur y st atute dir ects the Commission to

evaluat e all rel evant ec onomic factors, including price effe cts, “within the context of the . . . conditions of competition that are distinctive to the affected industry .” 19 U.S.C. § 1677(7)(C); Nucor Corp. , 318 F. Supp. 2d at 1215. In its Final Determination, the Commission found that U.S. prices were affected by

the industry ’s high d

egree of price sensitivit y a nd by the use of

Japanese prices in domestic negotiations. Final De

term. at 8, 16. The court in Nip pon II held that the Commissi on faile d to assess these findings in the context of the “peculi ar condi tions of c ompetition

” of the T CCSS industry. 223 F. Supp. 2d at 1350.

1. Price Sensitivity An industry is price sensitive if small diffe rences in price will induce purchasers to shift from one supplier to another. Second Re mand Dete

rm. at 57–58. Price se

nsitivity is releva nt to a material injury a

nalysis because

the more price sensitive the market, the gre ater the ability of lower-priced imports to impact the domestic industry ’s sales and prices. Id. at 58. In this case, the Commission previously found that the TCCSS market was charac terized by a hig

h degree of price sensitivity. Final De term. at 8. The court in Nip pon II held that this finding was unsupported by substantial evidenc e, noting that the record indicated that non-price factors outrank the importance of price in purchasing decisions. 223 F. Supp. 2d at 1361. In its Second Remand Determination , although the Commission provides a somewhat plausible explanation for its decision to give less weight to non-price factors highly ra nked in purchaser questionnaires, the record shows that the TCCSS market is only low to modera tely price se

nsitive.C OURT N O
. 00-09- 00479 P AGE 34

43 Hi gh er ra nk in g f

ac to rs in cl ud ed pr od uc t q ua li ty, av ai la bi li ty, pr od uc t c on si st en cy, reliability of supply, delivery time, and tec hnical support/service. Id.

44 Subsequent to this investigation, the Commission changed the wording in Question IV11 from “ lowest pr

ice” to “ price” to elimina

te the disc

repanc y be tween ho w price i s treate d in

(continued...) a. The ITC’s Decision to Give Less Weight to Purchaser Responses to Questions I

V-11 and III -18 is Rea sonable In purchaser que stionnaires, non-price factors, including quality and on-time delivery were consistently r

anked as more important than price. As a result, the cour t instructed the Commission to consider these non-price factors in assessing whether the TCCSS market is price sensitive. The Commission now explains that it accords less weight to the high ranking of nonprice f actors in purchas er quest

ionnaire s becaus e (1) the

wording of Questi on IV -11 is misleadin g, and (2) Questi ons I

V-11 and II I-18 do not take

into acc ount the qu

alifica tion proc ess in the TCCSS industry. First, Question IV-11 asks purc hasers to rate various factors as “ve ry important,” “somewhat important,” or “not important” to their purchasing de cisions. Overall, “lowest price”

was ran ked seve nth of approximately

ten fac tors. 43 Staff Report at II -12, Table II -4. The Commission gives less weight to this high ranking of non-price f actors, however, because it finds that the w ording o f questio n IV- 11 is mislea ding. Spe cifical ly, Question I V-11 re fers to “ lowest price” rather than simply

“price.” The Commission contends that while price may be a key factor to purchasers’ sourcing decisions, obtaining the “lowest price” may

not be crucial if other factors are not satisfactory

. Second Re mand Dete

rm. at 61. Plaintiffs do not challenge this theory

. Because price is the only

factor in Question IV-11 to use a superlative modifier such as “lowest,” the wo rding m ay in fact b e misl eadin g. 44C OURT N O
. 00-09- 00479 P AGE 35

44 (...continued) relation to the other factors. Id. at n.259.

45 Question III-18 asks purchase rs to “[p]lease list, in order of their importance, the three major fa ctors g eneral ly c onsidere d by [their] fir m in decid

ing fro m whom to pur

chase [TC CSS] for any one

order (examples include current availability , extension of credit, prearranged contracts, price, quality

of product, range of supplier’s product line, traditional supplier, etc.).” Purchaser Questionnaires at III -18. Price was identified in the top three considerations by 11 out of 15 purchasers, more than any other factor other than quality

. Staff Report at II -11, Table II -3. Second, t he Commission explains that the hig h ranking of non-pr

ice factors in re sponse to Questions IV-11 and I

II -18 45 may

not be ac curate

because the quest ions do not t

ake into

accoun t the qual ificatio n proces s in the TCCSS i ndustry . Plaintiff

s argue that the Co

mmission is merely re peating its previous arguments and not addre ssing the court’s concerns. The Commission, however, is directly responding to the court’s concern that it consider whether Questions IV-11 and I

II -18 refer to the post-qualification stage. Nip pon II , 223 F. Supp. 2d at 1361 (noting that neither the Commission nor the Defendant-I ntervenors attempted to rebut the fact tha t “Questi ons I II -18 and I

V-11 of the purcha ser ques tionnaire s clear ly a sk purcha sers to rank the importance of ‘lowest price’ and othe r considerations in choosing among qualified suppliers only”). More over, the court agrees with the Commission that because Q uestions IV-11 and II I-18 do not refere

nce a certain stage of the

qualification process, their answers may not be entirely ac curate with regard to purcha ser considerations. Nonetheless, the responses cannot be di sc ou nt ed en ti re ly. The TCCSS industry is characterized by long-term relationships established through a qualific ation pro cess. Pur chaser s begin by bu

yin g limited quantitie s from sup

pliers, a nd only after a potential supplier has proven that it can deliver the de sired quality and quantity in a steady and reliable manner does it become qualified as a supplier. Staff Report

at II -10. Thus, when aC OURT N O
. 00-09- 00479 P AGE 36

qualified supplier enters negotiations with a purchaser , the general quality and reliability of that supplier’s product has been established, leaving pric e and volume the essential factors to be negotiated. See Hr’g Tr. at 66–67 ( “If you ’re not th

rough the qualif

ication p rocess, which is determined by a

ll these other non-price factors, y ou don’t get a chance to offer your price .”). Questions IV- 11 and I

II -18, howe

ver, do not ask pur

chaser s to rank t

he importa

nce of th ese factor s at a ce rtain stage o f the q ualif icati on pro cess, and do not re flect the fac t that altho ugh quality and on-time delivery may be important consider ations at the pre-qualification stage, price
may be a more

important

factor after q ualifica tion. Thus, it is reas onable f or the Comm

ission to accord somewhat less weight to the responses to Que stions IV-11 and I II -18, where purchasers ranked n on-pric e facto rs as more

important

than pric e in their

purchas ing dec isions. Even though the Commission has provided a credible explanation for its decision to give less weight to these responses, it may not ignore the fact that quality and on-time delivery

are nonetheless critically importa nt considerations to TCCSS purchasers. See Staff Report at II -10 (“quality was most fre quently reporte d as the critical consideration in their purchasing decision s”); Koplan Dissent at 2 (“reliable delivery

is extremely important to purchasers . . .” ); Final De term. at 8 (“The record indicates that non-price factors such as product quality , product consistency, and on time de livery are very important in choosing suppliers.”). b. The Record Shows that the TCCSS Market is Low to Moderately Price Sensitive In its two prior determinations, the Commission found that the TCCSS market was “highly” price sensitive. Final De term. at 8; First Remand Dete rm. at 17. The Commission now contends that the market is merely “price sensitive.” Second Re mand Dete

rm. at 63. Be cause the four categ ories of

evidenc e relied

upon by the Commissi on suppor

t a finding

of low toC OURT N O
. 00-09- 00479 P AGE 37

46 Purchaser A stated that although a competitor made a bid that was two percent below a curr ent su pplie r, it n onet hele ss sta ye d with its cu rren t supp lier . [

]. Purchaser A Questionnaire Resp. , Dec l. of [ ], at 6. Purchaser A explained that winning its business is about “long term supplier relationships . . . not about the lowest price.” Id. moderate price sensitivity , the Commission’s analysis should reflect that less expensive subject imports had a low to moderate ability to ef fect domestic sales and prices. First, th e Commission

contends that the r ecord shows that mo st purcha sers wer e likely to shift suppliers based on small changes in price. Id. at 58. Evidence that purchasers shift suppliers in response to small changes in price indicates that a ma rket is price sensitive. Plaintiff s corre ctly

point out, however , that the evidenc e cited b y th e Commission leads to precisely the

opposite conclusion. Pl.’s Resp. at 17. For example, a memo cited by the Commission a

ctually shows tha

t Purchas er A was

unwilling

to shift vol

ume in lig

ht of small price change s. 46 In a

ddition, e vidence that purc hasers negotia

ted disco unt rate s to the hun

dredth percent does not indicate price sensitivity

. See Nippon I , 182 F. Su pp. 2d at 1 345 (notin

g that “ it is [not] appa

rent why the deg ree of p rice spe cificity

in nego tiations w ould be ne cessar ily indicativ e of pric e sensitiv ity” ). Final ly, purchas er estima tes of determinat

ive pric e diffe

rentials indicate d that most p

urchase rs were not likely

to shift sup

pliers be cause of

price di ffere

ntials ranging from two to six percent. See discussion supra Section I .B.2.b. ii. There fore, th is evidence does not show that the domestic TCCSS market is price sensitive. Second, the degree of substitutability between products is relevant to whether the marke t is price s ensitive b ecause “the mor e fung ible the p roduct, t

he more l ikely

that purc hasers w illC OURT N O
. 00-09- 00479 P AGE 38

47 Respondents specified that product specification distributions, non-price factors, timing of price negotia tions, com

petition- limiting r

egiona l factor s, and [ ] supp ly a greements decrease the products’ deg ree of substitutability. Staff Report at II -18.

48 The Commission estimated the range to be [ ]. In other words, a one percent change in price would induce a [ ] percent c hange in amount of product purchased. Id.

49 The percentage of c ost accounted for by TCCSS in a range of end-use products is as follows: tu

na can [ ]%; food can s [ ]%; aero sol [ ]%; paint can ring /plugs [ ]%. Staff Report

at II -5. make decisions based on price differenc es. . . [but] when products are highly differentiated, price is less likely to determine product sele ction.” General Motors Corp. v. United States , 17 CIT 697, 706, 827 F. Supp. 774, 784 (1993). Although the Commission claims that domestic and Japanese TCCSS are h

ighly substituta

ble, the r ecord in dicates that they actually have at b est a moderat e degr ee of sub stitutabili

ty. Althoug

h produc ers rep orted tha

t Japanese

and U.S. mercha ndise ar e “rela tively close sub stitutes”

with the exception of

some Japan ese specifications, respondents reported that the two products wer e less fungible. 47 As a result, the Staff Report estimated the elasticity of substitution, or how easily purchase rs switch suppliers when prices change, to be low to modera te. 48 Id. at II -17–II -18. Third, the Commission c laims that

the mark et is pric e sensitiv e becau se TCCSS ac counts for a large perce

nt of the total cost of production of many purchaser operations, and thus lowering the cost of TCCSS is the most effective way to increase profit margins. Depending on the final product, however, TCCSS can be a very large or relatively

small part of the final product c ost. 49 Because purchaser que stionnaires indicate that TCCSS accounts for approximately half of their total cost of pr oduction, the evidence as a whole supports the conclusion that the market is, at most, moderately price sensitive.C OURT N O
. 00-09- 00479 P AGE 39

Fourth, the Commission argues that the price sensitivity of the market is reflected by the fact tha t purcha sers con sistently

rated pr ice as one of the t

hree mos t importan

t factor s in their purchas ing dec isions. As d iscussed above, however , purcha sers ge nerally rated pr ice as th ird in importanc e, afte

r quality and on-ti me delive ry . There fore, th

is eviden ce does n ot support a finding of high price sensitivity

. In sum, the evidence re lied upon by the Commission indicates that the TCCSS market was low to

moderat ely price se nsitive—that lower

priced s ubject imp orts had a

low to mode

rate ability to impact the domestic industry ’s sales and prices. Contrary to the Commission’s assertion, this evi dence d oes not sup

port an affirmat

ive mater ial injury determination. Rat

her, it supports the opposite conclusion. See United States Steel Group v. United States , 18 CIT 1190, 1192, 1213, 873 F. Supp. 673, 680, 695 (1994) (holding that the Commission’s negative material injury determination rea sonably supported by finding that market was not highly price sensitive, and imports were not greatly substitutable). 2. Negotiation Practices In i ts Fi na l D et er mi na ti on , t he Co mm is si on fo un d t ha t c on tr ar y to pu rc ha se r t es ti mo ny, importer s often c onduct ne gotiations simultaneously and use a ggre ssive Japa

nese pri cing in domestic negotiations to leverage lower prices. Final De

term. at 16. The

court he ld that ev en if Japanese and domes tic neg otiations t ake plac e contem

poraneo usly , the Commis sion must sti ll address other ev idence i ndicatin g that th ese neg otiations r un on sepa

rate tra cks acc ording t

o different procedures and criter ia. Nip pon II , 223 F. Supp. 2d at 1352, 1361–62. Nonetheless, on its first remand, the Commission again failed to address evidence indica ting that (a) price negotiations are bifurcated, (b) a division of major and minor tonnage keeps negotiationsC OURT N O
. 00-09- 00479 P AGE 40

50 The Commission no longer relies on its theory that purchasers reallocated volume afte r entering into a contract. Second Re mand Dete

rm. at 66 n.277.

51 A Silgan representative testified, “I don’t look for the best price. That’s as simple as that. . . . I buy

around five percent from the Japanese. . . . I can get lower prices from se veral other sou rces. I ’m am not lo oking for the lowe st price. I’m l ooking f or the be st value, which is

(continued...) compart mentalize d, (c) su

pply agree ments pre vent for eign pr ice comp etition in d

omestic negotiations, (d) different delivery times segregate neg otiations, and (e) Weirton did not consider Japanese competition when calculating its prices. Id. Although the Commission argues otherwise, this evidence continues to indicate that Japanese and domestic neg otiations are compartmentalized. a. Price Negotiations are Bifurcated The court held that the Commission failed to address the extent to which bifurcation of price negotiations were repre sentative of purchasers’ practice s. Id. at 1362. In response, the Commission finds that there is a “significant body of evidence on the record” to show that price s of the Japa

nese pro duct wer

e in fac t used to ob tain lowe r price s from dome stic prod ucers. 50 Second Re

mand Dete

rm. at 66. Plaintiffs disagree. Pl.’s Resp. at 19. The evidence relied upon by the Commission does not substantially support its position. First, the Commission continues to rely on internal neg otiating memoranda from Purchasers E and F, which the court previously held were irrelevant. Nippon I , 182 F. Supp. 2d at 1348, n .37 (notin

g that on ly Pu rchase r F’s me mo indica tes that lower pric ed Japane se imports were taken into consideration during neg otiations with domestic suppliers, but the price discussion appeared incidental). Second, the testimonies of Silgan and U.S. Can ac tually cut agains t the Commiss ion’s find ing that purchas ers used

subject p ricing in domestic

negotia tions. 51C OURT N O
. 00-09- 00479 P AGE 41

51 (...continued) quality, service, a

nd price.” Hr’g Tr. at 208. And, a U.S. Can representative testified that “domestic mills do not recognize foreign mill prices as competitive situations that they can - - they choose to mee

t or being asked to meet. They flatly, absolutely

do not recognize it. . . . [They] don’t compete with the foreig n mills. It stops right there . . . .” Id. at 224–25.

52 “In 1997 and 1 998, [a Japa

nese supp lier] suppl ied [ ]% of [Pur chaser E’s] requirements, which share has increase d to [ ]% this year. During the pe riod in question, [the U.S. supplier] has been led to believe that the [Japanese] price was lower than its own, and as a result, [it] lowered its price to maintain its share of this account.” [ ].

53 The Commission concedes that [ ] specific instances of lost revenue involved only four small purcha sers. Second Re mand Dete

rm. at 66. Moreover, one out of four purchas ers disa

greed with [ ] lost re venue a llegat ions, and one sugg ested tha t [ ] lost revenue was due to non-price considerations. See Staff Report at V-25 (quoting [ ] statement

that “pr ice is not t

he only consider ation; cu stomer or

ientation is critical for the industry . [ ] has stringent specification requirements.”). Third, a U.S. supplier’s questionnaire response indicates that it believed that the Japanese pr ice was lowe r becau se Japane se volume increa sed, not be cause pu rchase rs used a ggre ssive pric ing in negotia tions. 52 Fourth, Weirton’s claims ar e underm ined by the fac t that it wa s unable t o document its allegations of Japanese price competition. See discussion infra Section I.D.2.e. Finally, althoug

h the Commission claims that six U.S. suppliers reported lost revenue, only three actually re sponded affirmatively when asked whether they reduced prices or rolled back announced price increases to avoid losing sa les to Japanese competitors. See Producer Questionnaires at IV-C. Of those three, only one r

eported specific instances of lost revenue. 53
See Staff Report

at V-22. Therefore, contrary to the Commission’s finding, there is not significant record evidence indica ting that purchasers used subject imports to obtain lower domestic prices. Rather, price negotiations appea r to be bifurcated.C OURT N O
. 00-09- 00479 P AGE 42

54 “We will c ontinue to

buy from [ ] but in r educed quantitie s. Plan is to

get [ ] from [ ] and [ ] fr om [ ] and this WI LL cut into ton s avail[ab le] to them. . . . [ ] is a good steady supplier but will likely lose volume due to foreign and commercial issues.” Purchase r F Memo[ ]. b. Purchasers Buy Major Domestic Tonnage and Minor

Japanese Tonnage The cour t also held

that the Commission failed to address the extent to which a division of major and minor tonnage between domestic a nd subject suppliers kept negotiations on separate tracks. Second Re mand Dete

rm. at 68–69. The Commission now finds that the fact that purchas ers buy

more dome stic prod

uct than s ubject imp orts does

not mean t

hat domes tic negotiations are sealed off from subjec t import pricing. Id. at 69. The Commission contends that the rec ord shows

that purc hasers d evelope d negot

iation str ategie s encompa ssing al l of their suppliers, domestic and foreign, before be ginning negotiations with domestic mills. Plaintiffs
argue that the e vidence cited by the Commissi on does no t show that subject prices we

re used i n domestic negotiations. Pl.’s Resp. at 19–20. Although the evidence cited by the Commission confirms that purchasers bought major tonnag e from domestic suppliers and minor tonnage from subject suppliers, it does not show that purchasers used foreign pr icing to leverage lower domestic prices. For examp le, altho

ugh an i nternal memo indic ates tha

t Purchas er F pla

nned to al locate more volume from Japanese sources and less from domestic suppliers, it does not show that such volume al location

affec ted pric e nego tiations. 54 Similarly, although another memo indicates Purchaser F’s plan to buy more volume from foreign suppliers and less from domestic sourc es would save t he pur chaser money, it does n ot sh ow tha t sub ject p ricin g was us ed to l everageC OURT N O
. 00-09- 00479 P AGE 43

55 “We attai

ned an [ ] (d

omestic/f oreign ) mix in FY ‘ 99 and ha

ve targ eted to achieve a [ ] mix in FY ‘00. The average saving s . . . is approximately $[ ] / ton.” Purchase r F Memo[ ].

56 Purchasers [ ] lease facilities from [ ], and [ ] leases a facility from [ ]. Staff Report at III-3.

57 For example, Purchaser E’s supply agreement with [ ] includes the following provisions: “During the term of this supply agreement, [the supplier] agrees to sell to [Purchaser E] [ ] percen

t of [Purch aser E’ s ] annual prime req uiremen ts for Tin Mill Products consumed or processed at the [leased] facility .” [ ] . “The pr

ice for all Tin Mill

Products s old by

[the supplie

r] to [Purchase r E] will be

negotia ted betwe en the pa

rties on a n annual b asis. [The

supplier ] is expected to be comp etitive with [Purcha ser E’s] lowest pric e . . . for domestica

lly p roduced Tin Mill Products . . .” Id. at 3. Therefore, although these a greements require purcha sers to buy the majority of their TCCSS from their supplier/lessors, they could buy minor amounts based on price. lower do mestic pr

ices. 55 Finally, the fa

ct that subject import volume increased over the period of investigation does not prove that subject prices were use d by purchase rs to obtain lower prices. The issue here is price effects. Therefore, although this evidence c onfirms that purchasers bought major volumes of domestic p

roduct a nd minor vo lumes of su

bject imports and indicates that subje ct import v olume increased over the period of investiga tion, it does not show that purchasers used foreign pricing to leverage lower domestic price s.

c. Supply Agr eeme nts Limit Price Compet ition to Do mesti c Bids Five pur chaser s lease f

acilitie s from two

U.S. suppli ers. 56 As part of these leasing arrangements, purchaser

/lessees and supplier/lessors enter into supply agreements, which set forth volume and pricing terms for extended periods of time. Staff Report at III-3, n.5. Although these supply ag

reements vary , most require purchasers to buy the majority of their TCCSS from the suppli er and r

equire s uppliers to compet

e only with other

domestic p

rices. 57 In Nip pon II , theC OURT N O
. 00-09- 00479 P AGE 44

58 On August 6, 2004, the Commission filed a Motion to Correct its May 11, 2004 B rief, to whi ch Pl ainti ffs di d not respo nd. In th at Mot ion, the Co mmis sion determ ined t he perc entage of total apparent U.S. consumption associated with supply agreements to be [ ]% in 1997, [ ]% in 1998, and [ ]% in 1999. ITC Mot. to Correct Brief at Ex. 1.

59 The following percentage s were bought pursuant to supply agreements over the period of inv estig ation : [ ]. Id. court held that the Commission did not address Plaintiffs arguments relating to the prevale nce and impact of these supply a greements. 223 F. Supp. 2d at 1363. In response, the Commission now finds that these supply ag reements are not prevalent in the industry and do not preclude purchasers from using foreig n prices to negotiate lower domestic prices. Second Remand Determ. at 72. Plaintiffs correctly assert that the Commission’s findings are unsupported by substantial evidence. First, the Commission finds that supply agree ments are not prevalent in the industry because the volume of TCCSS sold pursuant to such agreements over the period of investigation was a small percentage of the total apparent U.S. consumption. 58 The appa rent U.S. consumption, however, includes total domestic consumption from all sources. Moreover, the Commission’s calculations reveal that the vast majority of TCCSS bought by purchaser /lessees from supp lier/les sors wer e pursua nt to supply

agree ments. 59 The fact that most o f the TCCSS bought by four

large purchasers from two of the seven domestic suppliers was insulated from Japanese price competition, weighs aga inst the Commission’s conclusion that purchasers used Japanese pricing in domestic

negotia tions. In addition, the Commission’s finding that supply agreements do not preclude purc hasers from using foreign prices to neg otiate lower domestic prices is unsupported by substantialC OURT N O
. 00-09- 00479 P AGE 45

60 The Commission also argues that supply a greements do not prevent purchaser s from obtaining the bene fit of low er fore ign pric es neg otiated b y ot her purc hasers t hat are not subject to the domestic pricing limitation. For support, the Commission cites a statement from Purchaser A: “Altho ugh we a re a ca ptive customer of s orts, eve n [ ] has had to

lower its prices to us. We have a three y

ear contract with [ ] for quantity, but re negotiate price annually

. The decline in pricing is due entirely to domestic and European competition.” Purchaser A Questionnaire Resp. , Decl. of [ ], at 7. As Plaintiffs point out, this statement establishes no link between Japanese and domestic prices or neg otiations. Pl.’s Resp. at 21. evidence. The Commission contends that the language of supply ag

reements, which imposes an obligat ion on the s

upplier, does not pr

eclude a purchas er from u sing subj ect pric es in negotiations with suppliers. Second Re mand Dete

rm. at 72–73. Plaintiff

s argue that this argument is inconsequential because the re cord does not show that purchasers used subject imports to leverage lower prices. Pl.’s Resp. at 21. The Commission is unable to cite an instance when a purchaser, party to a supply ag

reement, used subject pricing to neg otiate lower domestic p

rices. 60 Even if such a purchaser attempted to use subject pric ing to negotiate lower domestic p

rices, however , a supplie

r would be

insulated , at leas t partly

, from mee

ting thos e prices . Indeed, the rec ord sh ows th at dom estic suppl iers s impl y refused t o comp ete wi th for eign prices. See Hr’g Tr. at 224 (“The domestic mills do not recognize foreign mill prices a s

co mp et it iv e s it ua ti on s t ha t t he y ca n- -- -t he y ch oo se to me et or be in g a sk ed to me et . T he y fl at ly, absolutely do not recog

nize it.”). d. Domestic Producers Enjoyed a Lead Time Advantage The cour t also held

that the Co mmission fa

iled to ev aluate p

urchase r perce ptions with respect to the domestic industry’ s lead time advantage as a potential explanation for kee ping negotiations compartmentalized. Nip pon II , 223 F. Supp. 2d at 1363. In response, the Commission a

cknowle dges tha

t the proximi

ty o f domestic

mills to thei

r purcha sers ge

nerallyC OURT N O
. 00-09- 00479 P AGE 46

61 The Commiss ion also po ints out tha t purcha sers use d longe

r delive ry times to ne gotiate lower foreign prices. Id. at 77. This evidenc e also shows that dif ferent lead time s led to Japanese and U.S. negotiations being conducted pursua nt to different criteria. gives them a lead time advantage , but it finds that this advantage is mitigated by several factors. Second Re

mand Dete

rm. at 75. Specifically, the Commission cites evidence that purchasers minimize (but concededly do not eliminate) long er delivery times by negotiating

for core specifications in advance of their production needs, a nd requiring Japanese suppliers to carry the cost of larger consignment inventorie s at storage facilities in the United States. Id. at 75–77. Plaintiffs argue that this evidence cuts ag ainst the Commission’s conclusion. Pl.’s Resp. at 21. The fact that purchasers neg otiate for advance specifications and for consignment inventories with Japanese suppliers but not with domestic suppliers, undercuts the Commission’s finding that U .S. an d Jap anese n egotia tion s take place o n equa l foot ing. 61

e. Weirton was Unable to Provide Documentation of Alleged Japanese Price Competition At the pub lic hear

ing, the Commission r

equeste d that Weir

ton submit do cumenta

tion to support its claim that subject import pricing damaged its negotiating leverage. I

n response, Weirton submitted “Competitive Price Allowance” sheets for several purcha sers during the period of investig ation and

conced ed that “the compe

titors liste d . . . are

alway s other do mestic firms.” See Pet’r Posthr’g Br. , Ex. 20, at 1 , (A.R. 2- 104), I TC App., Ta b 1, at 4. B ased on th

is informat ion, the c ourt foun

d that Weir

ton “appa rently derives its pricin g allow ance ra

nge sole ly according to pricing data of domestic producers submitted by its sales de partment.” Nippon I 182 F. Supp. 2d at 1348. The Commission disagreed and accorded little weig ht to Weirton’s inability to evidence its Japanese price competition. First Remand Dete rm. at 22–23. The courtC OURT N O
. 00-09- 00479 P AGE 47

62 A Weirton r

eprese ntative explained, “Do I g et speci fic quote s from Japa nese producers? No. Do I get spec ific quotes from customers say ing well this is the Japanese price of the product? No. I only

know, just like I know that other competitors, domestic competitors, are quoting different kinds of prices. I don’t know specifically

who’s doing it, so consequently , I could not identify that it was a spec ific Japanese product that was coming in and being competitive or pulling down prices. You only know that after the fact.” Hr’g Tr. at 150–51. in Nip pon II

held that the Commissi on faile d to justify its decisi on to acc ord little weight to this lack of evidence. 223 F. Supp. 2d at 1364. Nonetheless, the Commission aga in finds that Weriton’s lack of documentation should be accorded little weight. Second Re mand Dete

rm. at 78–80. Plaintiffs counter that since Weirton claimed to be highly sensitive to the alleged competitive pressures of subject imports, this lack of documentation is significant. Pl.’s Resp. at 22. This cour

t has held that “wha

t a party say s, or does

not say , conce

rning it s economi c condition can be important evidence of injury or lack thereof.” Allegheny Ludlum Corp. v. United States , 24 C IT 858, 1 16 F. S upp. 2 d 1276 , 1299 (2000 ) (cit ing Sunamerica De Aleaciones Laminadas, CA v. United States , 44 F.3d 978, 984 (Fed. Cir. 1994)). The Defenda nt-Intervenor here, We irton, all eges that it adjus ted pric ing bec ause of Ja panese c ompetition . Nonethe less, it is unable to back up this allegation with documentation. The Commission reasons that this lack of document ation is ins ignific ant beca use purc hasers d o not spec ify

the ident ity o f supplie

rs with which the y a re neg otiating , but ge

nerally mention of

fshore s uppliers to obtain lower dome stic prices. For supp ort, the Co mmission not es that Wei

rton only discover ed “aft er the f act” tha t it
was comp eting with Japane se price s. 62 Under this explanation, however, it is not clear why Weirton had documentation regarding spec ific domestic competitors, did not document “offshore” competition, and did not document Japanese competition “after the fact.”C OURT N O
. 00-09- 00479 P AGE 48

Accordingly , the Commission’s explanation for according little weight to this lack of document ation is un supporte d by

substantia

l evidenc e, and the

fact tha t Weirton—a

party to this action a nd princi pal suppor

ter of the petition—i s unable t

o provide evidenc e support

ing its al le ga ti on s, is im po rt an t e vi de nc e o f l ac k o f i nj ur y. II. Causation After assessing whether the volume, price effects, and impact of the subject imports on the domestic industry are significant, the statutory

“by rea son of” language implicitly requires the Commission to

“deter mine whet

her [these ] factors

as a whol e indica

te that the subject im

ports themselves made a material contribution to the overall injury .” Taiwan Semiconductor v. United States , 23 C IT 410, 4 14, 59 F. Sup p. 2d 1 324, 1 329 (1 999) ( quot ing Gerald Metals, Inc. v. United States , 132 F.3d

716 (Fe d. Cir. 199 7)); see also 19 U.S.C. § 1673d(b)(1). This “by rea son of” language “ma

ndates a showing of causal—not merely temporal—connection between the [subject imports] and the material injury.” Gerald Metals, Inc. , 132 F.3d at 720. To

establish this causal connection, a minimal or tangential contribution to the material harm is insufficie nt. Id. at 722. As part of this analy

sis, “the Commission mu st examine o ther fa ctors to e nsure tha t it is not attributing injury from other sources to the subject imports.” Statement of Administrative Action , H.R. Doc. No. 316, 103rd Cong., 2nd Sess. (1994), reprinted in Urug uay Round Agreements Act, L egislative History , Vol. VI, at 851–52. Although the Commission need not find that a

lternati ve cause s entirel

y ne gate th e likeliho od of subje ct imports having any adverse impact on domestic pricing, it must determine whether “their combined e ffect may dilute the effect of the L TFV imports, preventing [them] from being a material fa ctor.” TaiwanC OURT N O
. 00-09- 00479 P AGE 49

Semiconductor v. United States , 93 F. Supp. 2d 1283, 1291 (Ct. Int’l Trade 2000) (quoting Gerald Metals, Inc. , 22 CIT at 1014, 27 F. Supp 2d at 1355 n.8). As explained by this court, Frequently , several events—each of which is a nec essary a ntecedent and has an apprec iable ef

fect—c ontribute

to overa ll injury to an indus try . In s ome case s, another event ma y ha ve such a predominant eff

ect in pr oducing the harm as to make the effect of the LTFV imports insignificant and, therefore, to pre vent the LTFV imports from being a material factor. (This is not to say , however, that there may not be

more than one material factor to injury .) In addition, even if no contributing factors independently have a predominant effect, their combined effec t may

dilute the effec t of the L

TFV impor

ts, preve nting the LTF V imports from being a material factor. The statute requires that the Commission determine whether the LTFV

imports themselves made a material contribution to the injury suffered by

the domestic industry. Gerald M etals , 22 CIT at 1015, 27 F. Supp. 2d at 1355. In this ca se, the court held that the Commission had not sufficiently e nsured that it was accurately

attributing the harmful effects to lower-pric ed subject imports because “[t]he record reflects that the increased subject import volume must be attributed larg ely to purchase r priorities that are unrelated to price.” Nip pon II , 223 F. Supp. 2d at 1371. In particular, the c ourt held that the Commission had not reasonably explained why injury was not cause d by (A) U.S. quality and delivery proble

ms, or (B) non-subject imports. A. The Rec ord Consist ently shows t hat Purc hasers Boug ht Subject Import s Largely becau se of

U.S. Qual ity an d Reli abil ity Pro blems Non-price factors such as product quality and reliable delivery

are important consider ations to T CCSS purcha sers. Ma ny p urchase rs testif ied that th ey

experien ced U.S. quality and on-time delivery problems over the period of investigation. Final De term. at 26. Nonethe less, in its

First Remand Dete

rmination , the Commis sion was not persua ded by this evidence, which it found to be “inconsistent and contradictory ” with other record evidence. First Remand De

term. at 29–41. In contrast, the court he ld that the evidence was not inconsistent.C OURT N O
. 00-09- 00479 P AGE 50

Nip pon II , 223 F. Supp. 2d at 1367–69. In its Second Remand Determination, the Commission continues to find that evidence that purchasers turned to Japanese sourc ing solely bec ause of domestic quality and delivery time problems is inconsistent with other evidence showing that purchasers bought subject imports because of pr ice. Second Re

mand Dete

rm. at 87–117. Plaintiffs argue that the record consistently shows that purchasers turned to Japanese imports for these non-price reasons. Pl.’s Resp. at 24. An agency

has the discretion to weigh and judge the c redibility of conflicting

evidence. Nip pon III , 345 F.3d

at 1381; Chung Ling Co. v. United States , 16 CIT 636, 648, 805 F. Supp. 45, 55 (1992). While the court may not substitute its judgment for tha t of the agency , the
agency ’s findings must be reasonable and supported by substantial evidence. Bratsk Aluminum Smelter , Slip Op. 04-75 at 10. In this case, because the evidence cited by

the Commission reinforces purchaser testimony by showing that pur

chasers bought subject imports because of quality and deliv ery

consider ations, th e Commission ’s finding that they are inc onsistent i s unreasonable and unsupported by substantial evidence. Contrary to the Commission’s implication, the fact that some of the same evidence indicates that purc hasers also considered price when making purchasing decisions does not establish a conflict. Indee d, most purchasers reported that several factors drive the ir purchasing decisions. The question is whether subject imports made a material contribution to the injury, or whether the combined effect of other factors were of such a mag nitude as to prevent subject imports from being a material fa ctor in the injury. See Taiwan Semiconductor , 23 CIT at 416, 59 F. Supp. 2d at 1331. Although some evidence indicates that price wa s a purchasing factor, the re cord on the whole co nsistently

shows tha

t purcha sers boug

ht subjec t imports la

rgely because of U.S. qua

lityC OURT N O
. 00-09- 00479 P AGE 51

and reli ability

problems . In li ght of th

is consiste

nt eviden ce, the C ommission c annot re asonably ensure that it accurately

attributed harm to lower priced subject imports rather than to these other problems. Moreover, the combined effect of these problems may have

prevented lower-priced Japanese imports from being a material factor in the injury . Indeed, the rec ord shows neither that price was a material factor, nor tha t subject imports had a significant effect on domestic price s. See discussion supra

Section I ; see also Gerald Metals, Inc. , 22 CIT at 1014, 27 F. Supp. 2d at 1356 (noting that factors as a whole must indicate that L TFV imports themselves made a material contribution to the injury). Consequently , the record fails to show that harm was by reason of subject imports.

1. BWAY At the public hearing, a BWAY repre sentative testified that due to “a series of delivery and quali ty d isappoint ments with

certain U.S. mills,”

BWAY mad

e “a str ategic decision to diversify its sourcing

including additional sourcing [of TCCSS] from abroad.” Hr’g Tr. at 190. Nonetheless, the Commission finds that other record evidence contradicts B WAY’s testimony and shows that BWAY purchased subject imports based on price. Second Re mand Dete

rm. at 95. The court agrees with Plaintiffs, however , that the record does not support the Commission’s conclusion. Pl.’s Resp. at 25. First, BWAY’s questionnaire response is consistent with its testimonial evidence. Althoug h the Commis sion notes

that BWAY’s q

uestionna ire resp onse stat

es that it d

ecided t o take advantage of price

differences offered by

foreign suppliers over the period of investig ation, the next se

ntence s tates tha

t BWAY ha

d conce rns with do mestic sup

ply disruption s and qua

lityC OURT N O
. 00-09- 00479 P AGE 52

63 [

].

64 [ ]. Id. at II I-15.

65 Question I

V-10 ask s purcha sers to c ompare v arious a spects of U.S. and Jap anese TC CS S, in cl ud in g a va il ab il it y, d el iv er y te rm s a nd ti me , p ri ce , p ac ka gi ng , c on si st en cy, qu al it y, reliabil ity, and serv

ice. The fact tha t BWAY ra

ted U.S. “ deliver

y time” as sup erior to Ja

panese i s not nece ssarily

inconsiste

nt with its te stimony

that it wa s experie

ncing d elivery disappoin

tments with U.S. mills, considering that U.S. mills enjoyed an undisputed lead-time a dvantage. Id. at IV-10. problems

. 63 Similarly, BWAY stated elsewhe re in its questionnaire that although it dropped two U.S. suppliers due to price and commercial terms, it cut two others because of poor performance

re la te d t o q ua li ty a nd de li ve ry. 64 Therefore, BWAY’s questionnaire and te stimony do not contradict the quality a

nd delivery re

presentations. Second, B WAY’s com

parison o f domestic

and Japane se produc

t corre sponds with

its hearing testimony

, that it co nsidere d quality

an importa

nt purcha sing con siderati on. I n its comparison, although BWAY rated U.S. delivery time as superior to the Japanese, 65 it rated the quality of Japanese TCCSS as superior to the U.S. Third, although the Commission suggests otherwise, BWAY’s fa ilure to report any quality or delivery

problems with some U.S. suppliers is not inconsistent with its hearing testimony . In the heari

ng, the BWAY re

present ative sta ted that B WAY had pr

oblems “w

ith certain U.S. mills.” Hr’g Tr. at 190. I n addition , the Commis sion even conced es that thi sC OURT N O
. 00-09- 00479 P AGE 53

66 As it did in its First Remand Determination, the Commission argues that BWAY’s purchasing history

with [ ] is inconsistent with its hearing testimony. Second Remand Determ. at 97–98; First Remand Dete rm. at 33–34. Becau se the co urt prev iously held that this evidence is not inconsistent, it will not address this issue again. Nip pon II , 223 F. Supp. 2d at 1367.

67 In

its qu estionnai

re re spons e, Cr

own sp ecif

ied that the

re wa s [
].

68 [ ] has a prod uction fa cility in [ ], where the major

ity o f its purchasers are located. Staff Report at III-2. Beca

use the court in Nip pon II held that Crown’s qualific ation of [ ] wa s not nece ssarily inconsiste

nt with its st

ated qua lity concer ns, this issue will not be addressed again here. 223 F. Supp. 2d at 1368. In addition, although the (continued...) testimony is backed up by BWAY’s questionnaire, in which it reported that it shifted volumes from a c ertain U .S. supplie r becau se of qua

lity and deliv ery

concer ns. 66 Therefore, the evidence c ited by the Commission consistently indicates that BWAY purchased subject imports because of U.S. quality and reliable delivery

concerns. 2. Crown Crown indicated that it increased purchases of Japanese imports in 1999 bec ause of
qu al it y an d p er fo rm an ce pr ob le ms , a nd a s ho rt ag e o f W es t C oa st su pp ly. 67 Although the Commission rejects the credibility of Crown’s asse rtion on the grounds that it is inconsistent with other

record evidenc e, the Comm

ission ag ain fails

to provide

evidenc e that co ntradic ts Crown’s explanation for its shift to Japanese imports. First, the evidence cited by the Commission does not contradict Crown’s explanation that it shifted to Japanese imports due to a lack of alternate East Coast suppliers. Although the Commission notes that a certain East Coast supplier had ample available capacity that could have been used to supply the volumes Crown sourc ed from Japan in 1999, 68 it fails to point out thatC OURT N O
. 00-09- 00479 P AGE 54

68 (...continued) Commission a sserts oth erwise, Crown’s f ailure to criticize five othe r domestic

supplier s’ quality and on-time delivery

does not constitute substantial evidence that these five domestic suppliers provided Crown with reliable service and high qua lity product.

69 The Commiss ion also c ontends th at althou gh six othe

r East Coa st produc ers pre fer to keep the ir shipmen

ts within the

Eastern U.S. beca

use of fr eight e qualization charg es, they could theoretically ship their pr oducts to the Western United States. Second Re mand Dete

rm. at 102–03. The court a

grees with Plaint

iffs, how ever, th at the the oretica l ability to supply West Coast facilities does not undermine Crown’s explanation for its shift to Japanese sources. Pl.’s Resp. at 27–28.

70 The U .S. pr

oduc er is[ ]. this supplier reported on-time delivery problems associated with railway complications from June 1999 to 2000. Staff Report at III-2 n.2. Therefor

e, even assuming that this supplier had available capacity , the record indicates that it could not meet Crown’s West Coast on-time delivery re quirements in 1999. 69 Indeed, Crown noted that “de livery perf ormance” was a factor in its decision to buy Japanese imports that y ear. Second, Crown’s comparison of Japanese and U.S. merchandise bolsters its explanation that i t shi fted t o Jap anese i mport s becau se of q ualit y conside ratio ns. In th e comp ariso n, alt hough Crown ra ted U.S. a vailabili ty a nd delive ry time as sup erior to t

hat of the Japanese supplier s, it rated Japanese quality a

nd consistency super

ior to that of the U.S. Crown Questionnaire Resp. at IV -10. I

n addition , the fact that Crow n rated Ja panese a nd U.S. pri ces as c omparab le sugg ests that it purchased from these sources based on fa ctors other than price. Id. Third, evidence that Crown informed a U.S. producer tha t Japanese prices were lower than U.S. prices neither contradicts its explanation for why it purchased subject imports, nor constitutes substantial evidence that Crown bought subject imports because of pric e. 70 It isC OURT N O
. 00-09- 00479 P AGE 55

undispute d that Japa

nese pri ces wer

e lower t han U.S. p rices in 1 999. The f act that “ economic harm t o dom estic indu stry occu rred wh en LTFV im ports [we] re als o on t he mark et is n ot eno ugh to show that the imports caused a material injury .” Gerald Metals, Inc. , 132 F.3d at 719. In sum, the Commission fails to provide substantial evidence to discredit Crown’s explanation that it shi fted to su bject imports beca

use of ina dequate U.S. quali

ty a nd relia ble delivery proble

ms. 3. Silgan Silgan testified that it purchased Japanese imports for specialized applications that were either not availa

ble from t he domest

ic industr y or of a “qua lity level” not obtaina

ble from U .S. producers. Hr’g Tr. at 200–02 . Silgan a lso attrib uted its inc

rease i n Japanese

imports to i

ts acquisition of Campbell’s Soup, which used small quantities of TCCSS produced by Nippon because of superior quality and unique specifications not available from U.S. producers. Id. at 202. In addition, Silgan testified that it terminated Weirton as a supplier for failing to meet Silgan’s quality and se

rvice requirements. Id. at 200–01 . Finally , Silgan s tated tha

t if it wer e to purchase according to price , it would purchase from Brazil, Korea, and Taiwa n. Although the Commission finds that this testimony is undermined by othe r record statements indicating that Silgan based its purchasing decisions on price, it fails to support this finding with substantial evidence. First, th e fact that Silga

n increa sed its pur

chases o f Japanes e imports a t the same

time Japanese producers were underbidding domestic producers is not inconsistent with Silgan’s testimony. I

n fact, it corresponds with Silgan testimony that it increased its purchases of subjectC OURT N O
. 00-09- 00479 P AGE 56

71 In addition, Silgan’s purchasing history, which shows an incre ase in purchases from Nippon in 1999 is fully consistent with Silgan’s testimony that it increased Japanese purchases when it ac quired Ca

mpbell’s So

up in 1998. Contrary

to the Commis sion’s as sertion, Silgan di d not testif y th at it beg an, but ra

ther tha t it “conti nued using” Nippon, and “inc reased ” its purchases from Japan because of this acquisition. Id. at 202.

72 The C ommis sion a

lso po ints out tha

t Silg an [ ]. That Silgan note d pro blems with [ ] does

not su gge st any inco nsistenci es. [

(continued...) imports during the period of investigation due to its acquisition of Campbell’s Soup. 71 Moreover, as discussed above, a temporal conne ction between LTFV imports and material harm is insufficient to establish causation. Gerald Metals, Inc. , 132 F .3d at 719 (c itin g United States Steel Group v. United States , 96 F.3d 1352, 1358 (Fed. Cir. 1996)) (“To claim that the tempora l link between these events proves that they are causally

related is . . . fallacy

. . . .”). Second, the Commission concedes that Silgan’s questionnaire response and hea ring testimony verify

that Silgan discontinued buying from Weirton because of quality problems. Second Re

mand Dete

rm. at 114–15. In a weak a ttempt to discredit this consistent evidence, the Commission reasons that “Silgan made no other comments on this issue in its questionnaire response, did not describe these failures in any detail, and provided no documents to the Commission showing what quality or delivery problems Weirton was having prior to 1998.” Id. at 115. Th

is lack of particu lar ty pes of ev idence, however , does not u ndermine otherwis e consistent evidence. 72C OURT N O
. 00-09- 00479 P AGE 57

72 (...continued)

].

73 The Commission also asserts that price is an important factor in Silgan’s sourcing decisions. The court in Nip pon II already addressed this argument, holding that “[t]he Commis sion i s cor

rect to percei ve th at Sil gan ’s pr

iorit ies a ppea r to be [ ], in that order, but fails to recognize that the same ranking of pr iorities explains why Silgan c hose not to

purchas e from B razil, Kor ea, and Taiwan, and explai

ns why Silgan w ould shift its purchases toward subject imports.” 223 F. Supp. 2d at 1369. The Commission offers no contrary evidence here. Third, oth er state

ments by Silgan su pport its te stimony

that it pur

chased Ja panese i mports because U.S. suppliers were unable to meet ce rtain specifications. A Silgan representative testified, “we purchased . . . wide tin-free steel from Japan . . . because our equipment is designed
to run . . . w

ide coils . . . . No U.S. mill can pr ovide . . . wide tin- free ste el. I f we buy U.S. produce d narrow er coils, we lost [a p ercent age] of our output . This not on

ly a ffects o ur costs, but it constrains our capacity .” Hr’g Tr. at 201. The Commission claims that this statement contradicts its testimony by proving that “Silgan was able to, and did, use the domestic produc t in place of the wider product supplied by the Japanese.” Second Re mand Dete

rm. at 117. On the contrary , this statement is consistent with Silgan’s testimony that U.S. suppliers could not meet Silgan’s “specialized applications.” 73 Hr’g Tr. at 202. Accord ingly , the rec ord consi stently shows tha

t Silgan p urchase d subject

imports la

rgely because of non-price conce rns.C OURT N O
. 00-09- 00479 P AGE 58

74 The Commission’s lengthy discussion reg arding an alleged cor relation between low U.S. prices and U.S. Can’s domestic purchasing patterns is similarly off point. Nonetheless, the evidence cite d by the Co mmiss ion pa

rall els U .S. Ca

n’s h eari ng te stimo ny

by emph asizi

ng [

(continued...) 4. U.S. Can U.S. Can te stified th at it incr eased it s volume of

Japanese imports be cause of

U.S. quali

ty and on-time delivery

problems, and because of the desire to source TCCSS on a more global basis to serve its increasingly international operations. Hr’g Tr. at 196–97. Although the Commission concedes that this testimony is consistent with U.S. Can’s testimony at the preliminary staff

conference, it finds that it is undermined by other record evidence. The c ourt agrees with Plaintiffs, however, that the statements cited by the Commission are neither in co ns is te nt no r c on tr ad ic to ry. First, pu rchasin g data f or 1999 su

bstantiat es U.S. Ca

n’s hear ing test imony that it increased its purchases of Japanese imports while decre asing its purchases of U.S. TCCSS. The Commission a sserts tha

t this purc hasing h istory conflic ts with ano ther U.S. Can state ment: “[U.S. Can] did not favor the Japanese mills and take tons away f rom Weirton Steel. . . . Japanese tonnage [was] reduced [during certa in months in 1999] for reasons of inventory control.” Id. at 199 . Evid ence in dicat ing th at U.S . Can i ncreas ed its total 1999 J apanes e tonn age is not necessarily inconsistent with testimony that U.S. Can decreased Japanese tonnage dur ing certain months of 1 999. More over, as Plaintiff s point out th

is eviden ce is not r elevant to causation. It is undisputed that U.S. Can increased its purcha ses of Japanese imports in 1999; the issu e is wh ether o r not i t did so by reaso n of J apanes e prici ng. 74C OURT N O
. 00-09- 00479 P AGE 59

74 (...continued) ].

75 Memo to fil e from

[ ] (“U.S. Can monthly tonnage . . . ha s been reduced due to service.”)

. Memo to fil e from

[ ] (“While we

missed [ ] in on e quarte r in 1997, [ ] d

id not brin

g this up a s a comp laint beca use o f the reco gnit ion of their cont inuin g poor ser vice perf orma nce. . . . We covered with them that we still are intent with [ ] (and a few other mills with service issues, but not as bad as [ ] to have . . . [penalties] . . . apply when service fa lls.”).

76 Because the court previously held that “U.S. Can’s internal documents indicate that quality problems persisted with the domestic supplier ‘f or a long period of time,’ a fact that is not negated by

statements in the same document that the problems had improved over this time,” Nip pon II , 223 F. Supp. 2d at 1369, this issue will not be reexamined here. Second, t wo internal memos r

egard ing U.S. C an’s negotiations w ith a par ticular U .S. supplier reinfor ce U.S. Ca

n’s hear ing test imony that it increased

purchas es from Jap an due to U.S. reliability problems. Although noting that foreign suppliers were offe ring “aggr

essive pricing,” both memos emphasized that U.S. Can was experiencing on-time per formance
pr ob le ms wi th U. S. su pp li er s a nd re du ce d v ol um es ac co rd in gl y. 75 Therefore, these internal

me mo s r ei nf

or ce U. S. Ca n’ s h ea ri ng te st im on y. Third, U.S. Can’s rating of U.S. and Japanese TCCSS also supports its hearing testimony

. Althoug h U.S. Can r

ated U.S. deliver

y time and av ailability

as super ior to that of the Japa

nese, it rated Japanese quality, c onsistency, and re liability superior to the that of the U.S. suppliers. U.S. Can Questionnaire Resp. at IV -10. This s upports U .S. Can’s t

estimony that it increased

its purchas es of Japa

nese impo rts due to

U.S. quali

ty a nd relia bility problems

. 76 Therefore, the evidence c ited by the Commission is fully consistent with U.S. Can’s hearing testimony

that it increased its purchases of subject imports for reasons other than price.C OURT N O
. 00-09- 00479 P AGE 60

77 [ ]. Staff Report at IV-5, Table I

V-4. B. The Rec ord indicat es that N on-Subjec t Impor ts were a S ignificant F actor in the U.S. Market During the period of investigation, non-subject imports acc ounted for a greater propor tion of total U .S. marke

t share than Japane se imports

. 77 Final De term. at 10. Nonetheless, the Commission r

ejecte d the cont

ention tha t non-subj ect impor

ts accou nted for decline s in domesti c pricing , finding

that “[a]lthough non -subjec t imports we re a sig nifican t factor in the dome stic market d uring th e period

of invest igation , subject

imports g

rew more rapidly and wer e gene rally priced more aggre ssively.” Id. at 22. The court in Nippon Iheld that this finding was unsupported by substantial evidenc e because the Commission failed to consider whether nonsubject im

ports were predominant in the regions where the majority of domestic shipments were concentrated, and failed to compile its price compar ison data in a manner to facilitate the court’s review. 182 F. Sup

p. 2d at 13 54–55. On

its first r emand, th e Commission

did not com

ply with the court’s instructions. Nip pon II , 223 F. Supp. 2d at 1369–71. In its Second Remand Determination, the Commission again finds that non-subject imports were not the predominant cause of injury

to the domestic industry during the period of investigation. Second Remand Determ. at 127. In making this determination, howeve r, the Commission fails to ( 1) evalu ate whether non-subje ct import v olume was predominant in re gions wh ere the majority of domest

ic shipments were concentrated, and (2) re asonably interpre t non-subject import pricing data.C OURT N O
. 00-09- 00479 P AGE 61

78 The court in Nip pon II

dismissed the Commission’s finding that subject imports were the sourc e of the d

omestic in

dustry ’s harm b ecause

of the de clining

perfor mance of West Coast TCCSS producers. 223 F. Supp. 2d at 1370. The cour t noted tha

t “[t]o find su

bject imports a material cause, even on the West Coast where non-subject imports were not the predominant (continued...) 1. The ITC Fails to Evaluate whether Non-subject Import Volume was Predom inant in Regions where t he Major ity of Dom estic Shipm ents were m ade The major

ity o f U.S. pro ducers a

re loca ted in the East and M idwest an

d supply purchasers in those regions. Staff Report at II-1. Japane se produc ers, whil e compet ing hea vily in the West, supply purchasers throug hout the United States. Final De term. at 10. Non-subject producers compete only

in the Eastern and Midwestern United States. Id. In lig ht of this regional competition, the court instructed the Commission to evaluate whether non-subjec t imports were predominant in regions where the ma jority of domestic shipments were concentrated. The court explained that “[e]ven if subject and non-subject market share leve ls are ‘comparable’ on the whole, non-subject imports are not ne cessarily pr ecluded from constituting the predominant source of injury where, as in this case, they are concentrated in regions to which most domestic shipments were made.” Nippon I , 182 F. Supp. 2d at 1355. In its Second Remand Determination, the Commission finds a correlation betwe en the increased volumes of subject imports to the West Coast, and the apparent financial de clines of the domestic West Coast producers. Second Re mand Dete

rm. at 122. Plaintiffs argue that because the majority

of domestic TCCSS shipments and non-subject import volumes are concentrated on the East Coast, non-subject imports constituted the predominant source of injury during the period. Pl.’s Resp. at 34–35. The Commission once again refuses to comply with the court’s instructi ons. 78 By re fusing to assess non-subject import volumes in the East andC OURT N O
. 00-09- 00479 P AGE 62

78 (...continued) imports , the Commission needed to determine whether there is a corre lation between the supposedly declining

U.S. mills’ West Coast revenues, specific instances of underbidding by producers of subject imports, and a subsequent shift in volume to those subject imports.” Id. (emphasis added). The Commission relies on this statement to justify its continuing f ocus on the West Coast e

ven afte r the cou rt clear ly in structed

it, in both p revious o

pinions, to

assess th e East Coast and Midwest regions. A link between subject imports and West Coast revenues is not sufficient to show that subject imports’ contribution to the overall harm was material. See Taiwan Semiconductor , 23 CIT at 416, 59 F. Supp. 2d at 1330–31 (holding that the Commission mu st “rea sonably find[] that th e subjec t imports’ contribu tion to the overall h arm is material”). Midwest, t

he Commission has no ba sis for en suring t hat it did no t attribut

e the har mful eff ects from non-subject imports to the subject imports.

2. The ITC Fails to Reasonably Interpret Non-subject Import P ricing Data
In Nip pon II , the court criticized the Commission’s analysis of the underselling patterns of subject imports compared to non-subject imports. 223 F. Supp. 2d at 1370–71. The court held that by collapsing

the data into two-yea

r increments, the Commission obscured the fact that there is no clear pattern when analy zed from year

to year. Id. On its second remand, the Commission prepared new charts and re-prese nted the data. Based on the revised data, the Commission finds that underselling by non-subject imports and subject imports over the period of investigation was “mixed.” Second Re mand Dete

rm. at 125. This mixed data, the Commission contends, establishes that subject imports had more than a minimal or tangential amount of injury on the domestic industry

. Id. at 126. Plaintiffs argue, on the other hand, that the data is not mixed, but rather when analyzed on an individual purchaser basis, shows that nonsubject imports almost always undersold subject imports. Pl.’s Resp. at 35. The Co mmis sion presen ts tw o chart s. The first chart c ompar es the weight ed aver age prices that six large purchasers paid for Japanese and non-subject merchandise over the period ofC OURT N O
. 00-09- 00479 P AGE 63

79 In 1999, Purc hase

r F pa id les s for non- subje ct mercha

ndise : Japa

nese [ ]% discount rate and non-subject at [ ]% discount rate. Id. at 124, Table Second Remand 4. Similarly, in 1997 Purchaser A paid less fornon-subject TCCSS: Japanese $[ ] and nonsubject $[ ]. In 1997, Purchaser E paid less for non-subject merchandise: Japanese [ ]% and non-subject [ ]% discount rate; and in 1999, the discount rates were both [ ]%. On the other hand, Purchaser C paid less for Japanese TCCSS in 1999: Japanese [ ]%, non-sub

ject [ ]% disc ount rate s. Purcha ser B pa id less for Japanese TCCSS: 1997 - Japanese [ ]%, non-subject [ ]%; 1998 - Japanese [ ]%, non-subject [ ]%; 1999 - Japanese [ ]%, non-subject [ ]%; 2000 - Japanese [ ]%, non-subject [ ]%. Finally, in 1997 and 1998, [ ] paid less for Japanese, but morein 1999: 1997 - Japanese $[ ], non-subject $[ ]; 1998 - Japanese $[ ], nonsubject $[ ]; 1999 - Japanese $[ ], non-subject $[ ]. Id. This data is mirrored by individual purchasing data in the Staff Report. See Staff Report V-10–V-21. investigation. Second Re mand Dete

rm. at 124. It reveals that over the period of investigation, three purchasers paid less for non-subject TCCSS, two paid less for Japanese TCCSS, and one paid less for Japanese TCCSS in 1997 and 1998, but more in 1999. 79 The second chart compares non-subject bids to Japanese bids. Althoug h there were more total non-subject bids “above” than “below” all Japanese bids over the e ntire period of investig ation, fr

om 1997 to 19 99, the nu

mber of n on-subje ct bids “b elow all Ja panese b ids” steadily increa sed. I

n addition , in 1999, the y ear in wh ich the Com

mission fin

ds the most instance s of subje ct under selling , there w ere mor e non-sub ject bids “

below all Japanese bids” than “within” or “above.” Second Re mand Dete

rm. at 125, Table Second Remand 5. Although subject imports need not be the sole or principal cause of injury, Nip pon III , at 1381, “a positive correlation concerning non- subject import[s] . . . in conjunction with other factors, may

be sufficient to cut the causal connection betwee n subject imports and any har m suffered by

the domestic industry.” Altx, Inc. v. United States , 167 F. Supp. 2d 1353, 1361–63 (Ct. I nt’l Tra de 2001) . In th

is case, the rec ord not onl y in dicates that non- subject im

portsC OURT N O
. 00-09- 00479 P AGE 64

potentially had a sig

nificant effect on U.S. prices, but it also affirmatively demonstrates that quality and delivery

problems affected the domestic industry . These aspects of the record indicate a gap in the causal connec tion between lower priced imports and material harm to the domestic industry. See Gerald Metals, Inc. , 132 F.3d at 721. The record simply does not support a finding that subject imports caused injury to the domestic industry. CONCLUSION The Commission’s affirmative injury dete rmination is unsupported by substantial evidence. As indicated previously , the record does show some increase in the volume of subjec t imports, but despite some isolated fragments of positive evidence, the rec ord does not show that subject imports had a significant effect on domestic price s, or that purchasers bought significant volumes of subject imports by rea son of lower prices. On the contrary , because the record shows that the effect of subject imports on domestic prices was insignific ant and that harm suffered by the domestic industry was not ca used by lower-

priced Japanese TCCSS, it compels a negative material injury dete

rmination. See INS v. Elias-Zac arias , 502 U.S. 4 78, 481 (1 992) (“T o rever se th e [ ag en cy’ s] fi nd in g w e m us t f in d t ha t t he ev id en ce no t o nl y supportsthat conclusion, but compelsit . . .”) (emphasis in original). Regarding price ef

fects, not only was Japanese underselling and domestic price depression or suppression insignificant over the period of investig ation, but certain conditions of competition also minimized any effect subject imports could have had on domestic prices. Specific ally , lower-

priced i mports ha d only a low to mod

erate a bility to impact t

he domest

ic industry’s sales and pric es; Japanese and U.S. price negotiations were c ompartmentalized; theC OURT N O
. 00-09- 00479 P AGE 65

majority of the industry ’s product was supplied by dome stic producers; several large pur chasers bo ug ht U. S. TC CS S p ur su an t t o s up pl y ag re em en ts th at li mi t p ri ce co mp et it io n d om es ti ca ll y; superior domestic lead times seem to translate into price premiums and seg regate Japanese and U.S. price negotiations; and the principal supporter of the petition had no docume ntary evidenc e of Japane se price

competiti on. Ther

efore, the rec ord indic ates tha t the eff ect of su bject imports on domestic prices was not significant. With respe ct to cau sation, th e recor d does not show that lower-pr iced Japa nese impo rts were a material factor in the domestic industry ’s harm. On the other hand, it does show that purchas ers boug

ht incre ased volu

mes of Japa

nese impo rts beca

use of concerns w

ith domesti c producers’ product quality and reliable delivery , and that non-subject imports were an important competitive factor in the domestic market during the per iod of investigation. Thus, the record shows that the harm suffered by the domestic industry was not by reason of subject imports. In sum, the record fully

supports a negative determination and will not support an affirma tive one. The cour

t has cons idered w

hether t o leave t o the Commis sion’s disc

retion, a s it ordinar ily would, the i ssue of r

eopening the rec ord for f

urther in vestiga tion, par ticularl y be cause

non -su bj ect im por ts wer e no t fu ll y stu di ed, but suc h i nfo rma ti on w oul d no t ch ang e th e re sul t. It likely would be more support for a negative determination. The ag ency ha s had three opportunities to investigate this matter and its attempts to obtain new supportive information on price effects have not been succ essful. Further, it is not fair to Plaintiffs to delay this matter when lack of adequate investigation is not the primary problem. While flawed, the investigation gathered most of the relevant materia l. It simply

does not support an affirmative determination.C OURT N O
. 00-09- 00479 P AGE 66

80 The Federal Circuit recently cited Nip pon III

in a footn

ote, stati ng that “Section 1516a limits the Court of International Trade to aff irmances and remand orders; an outrig ht reversal without a remand does not appear to be contemplated by the statute.” Altx, Inc. v. United States , 370 F.3d 1108, 1111 n.2 (Fed. Cir. 2004). The Feder al Circuit’s statement must be read in the context of the principles of administrative law. See e.g. 5 U.S.C. § 706 (2000) (Administrative Procedure Act instructing reviewing court to “compel agency

action unlawfully withheld or unreasonably

delayed,”

and “hold unlawful and set aside agenc y action, finding s, and conclusions found to be . . . unsupported by substantial e vidence . . .”) ; Ammex Inc. v. United States , No.0 2-003 61, S lip O p. 200 4-89 a t 5 (C t. Int’l Trade J uly 20, 2 004) ( quot ing McDonne ll Dougla s Corp. v. N

ASA , 895 F. Supp. 316, 319 (D.D.C. 1995)) (holding that remand would be inappropriate because “the rec ord was inadequate to support the agenc y’s ‘er roneous decision’ [whi ch] i s diff

erent f rom it s ‘bei ng inad equat e to su pport any decisi on or f rom su fferin g a procedural deficiency

that might necessitate remand.’ Otherwise, ‘a dministrative law would be a never ending loop from which ag grieved parties would never re ceive justice.’”). Moreover, langua ge of § 1516a lea

ves the na ture of a ny r emand ope

n. Neithe r Congr ess nor th e appell ate court could have intended endlessly futile remands. Rather, a remand with specific instructions would appear consistent with case law and the statute. Accordingly , the court concludes that because the Commission is unable to obtain new evidenc e to sign

ificantl y su pplement the rec ord, due

to the pas sage o f time and other re asons, further investigation or reconsideration in this matter is futile. The Commission’s Second Remand Determination is remanded with instructions to issue a negative mater ial injury determination. 80 See 19 U.S.C. §1516a (“If the [court’s] final disposition of an action broug ht under this section is not in harmony with the published determination of . . . the Commission, the matter sh all be re

manded to

. . . the Com

mission, as

appropr iate, fo r dispositi on consist ent with the final disposition of the court.”). The court has previously

declined to remand this matter for a determination of threa t of material injury, larg ely on the basis that Weirton neither ra ised the issue of threat before the court, nor presented a viable threat ca se in its post-hearing brief before the Commission. NipponC OURT N O
. 00-09- 00479 P AGE 67

Steel Corp. v. United States , No. 00-09-00479, Slip Op. 02-116 (Ct. Int’l Trade Sept. 26, 2002). Upon further review of Nip pon III , the cour t conclud es that it i s better p

ractice for the a gency in the first instance to determine whether a threat of injury dispute remains. The remand determination is to issue within sixty day s hereof. Objections thereto may be filed within eleven day s thereafter.

/s/ Jane A. Re stani Jane A. Restani Chief

Judge

Dated: New York, New York This 14th day

of October, 2004ERRATA

Please make the following changes to Nippon Ste el Corp. v. United Stat es , No. 00-09-00479, Slip Op. 04-131, October 14, 2004:

• Page 3, line

3: Replace “

Nippon Ste el Corp. v. United Stat es ” with “ Nippon Steel Corp. v. International Trade Commission ”

• Page 5, line

4: Replace “ Id. at II-7, IV-5. Id. ” with “ Id. at II-7, IV-5.” October 21, 2004