Slip Op. 07-16

UNI TED STATES COURT OF I NTERNATI ONAL

TRADE



### C EL AN ESE 

### C HEM I CA L S 

### L TD 

### ., :

Pl ain tif f , :

v. :



### U NI T E D 

### S TATES 

### , : Court No. 04-00594 Defendant
, P UB LIC VE RSI ON

: and

: 

### E. I. D U 

### P ON T DE 

### N EMO UR S 

### & C O



### . and 

### C HANG 

### C HUN 

### P E T RO 

### C H EM IC A L 

### C O 

### ., L TD 

### ., :

De fe nd an t- In te rv e no rs . :

[P laintiff’s Motion for Judgment Upon Ag ency Record g rante d in part; Neg ative Prelim inary Deter mination remande d to I nterna tional Trade Commi ssion.]

Dated: January 29, 2007

Gr e e nb e rgTr a

ur ig , L L P ( Phi lip pe M. B ru no , Jef fr e y S. N e e ly , E ri c Ar on so n, a nd Ros a S. J eong ), for

Plaintiff.

J ames M. L y ons, Gene ral Counsel, U.S. I nterna tional Trade Commi ssion (Mark B . Rees); fo r D e fe nd a nt.

Crowell & Moring L L P (Matthew P

. J af fe , J eff rey L . Sny der, A lexander H. Scha efe r, and Er in E . M iki ta ), fo r D e fe nd a nt- I nte rv e no rs

.

OP IN ION

RI DGWAY, J udg e:

I n this action, plain t i ff

Celanese Chemicals L td. contests the neg ative pre liminary

de te rm inatio n r e a c he d b y the U. S. I nte rna tio na l T ra de Com mis sio n in a n a nti du mpi ng du tyCou rt N o. 04- 0059 4 Pag e 2

The Commission’s determination, public versions of the views (ma jority and dissenting ), 1 and the staf

f re port in this investi g ation are published, with business proprietar y information reda cted
, in

Po ly v in y l A lc o h o l f

r o m T aiwan, I

nv. No. 731-TA- 1088 (Preliminary ), USI TC Pub. 3732 (Oc t. 2004) (“Pre liminary Deter mination”) ( available at

https:/ /eo fpub.usitc.g ov/edis-ef ile/app as document number

217696). The a dminist rative r ecor d consist s o f three sections, desig nated “Public” (P.D. ___ ), “ Confidential” (C.D. ___ ) , and “Privileg ed,” r espec tiv el y

. The “ Public” section includes c opies o f d o cu m en ts from the “Confide ntial” sec tion with all confidential information re dacte d.

The publicly available version of the Commi ssion’s vie ws included in the p reliminary deter mination is cited as the “Pre liminary Deter mination.” The c onfidenti al ver sion of the Com mis sio n’ s v ie ws inc lud e d in the a dmi nis tr a tiv e re c or d a s C. D. 65 is c ite d a s “ Con f. Com m. Vi e ws .” An d th e c on fi de nti a l st a ff re po rt that ac com pan ied the Com mis sio n’ s f ind ing s, wh ic h is in clu ded in th e adm in is tr ati ve re cord as C. D. 3 4 (o ri ginal ), as ame nd ed b y C. D. 3 5 (M em. I

NV-BB127 (Oc t. 18, 2004)) and C.D. 43 ( Mem. I NV-B B- 130 (Oc t. 21, 2004)), is cited as the “Staff Report.” investiga tion of pol y

viny l alcohol im ports from Taiwan. See Poly viny l A lcohol Fr om Taiwan, 69

Fe d. Reg . 63,177 (Oc t. 29, 2004) (notice of preliminary

deter mination). Pending be fore the Court

1

are Plaintiff’s Motion for J udg ment Upon the Ag ency Record and s upporting briefs, in whic h

Celanese contends that the Commi ssion’s de termination in this matter wa s “ar bitrary , capr icious, an

abuse of discretion and not in acc ordanc e with law,” a nd which re quests that the matter be rema nded

to the ag ency

. See ge nerally Br ief in Support of Plaintiff’s Motion for Judgment Upon the A g ency
Record ( “Pl.’s Br ief” ); Reply Br ief in F urther Support of Plaintiff’s Motion for J udg ment Upon the

Ag ency Record ( “Pl.’s Reply

Br ief” ).

The Commission and Defe ndant-I nterve nors – E.I . DuPont de Nemours & Co. and C hang

Chun PetroChemical Co., L td. – oppose Celanese ’s motion
, an d maintain that the Commiss ion’s

deter mination should be sust ained in all respects. Se e ge ne ra lly Memorandum of

Def endant United

States I nterna tional Trade Commi ssion in Opposit ion to Pl aintiff’s Moti o n fo r J udg ment on theCou rt N o. 04- 0059 4 Pag e 3

Poly viny l alcohol (“ PVA”) is a w ater -soluble sy nthetic poly

mer. As the Commiss ion staff 2

e x p l a i n s : “ P V A i s u s e d p r i m a r i l y a s a n i n t e r m e d i a t e p r o d

u c t i n t h e p r o d

u c t i o n o f P V B [ p o l yv i n yl buty ral], which is an adhe sive used in the manufa cture of automotive saf ety g lass and load- resistant

arc hitectura l gla ss. PVA is also used in the tex tile and pape r industries in s i z i n g formulations; as

a b i n d e r i n a d h e s i v e a n d

s o i l b i n d i n g f

o r m u l a t i o n s ; a n d

a s a n e m u l s i o n o r

p o l y m e r i z a t i o n a i d

in colloidal suspensions, water -soluble films, cosmetics, and joint compounds.” Staff Report at I -6. Ag ency Record (“De f.’s Brief ”); Memorandum of P oints and Authoriti es in Opposition to Mot ion

for Judgment on Ag ency

Record ( “De f.-I nts.’ Br ief” ).

For the rea sons se t f

orth below, Plaintiff’s Motion for J udg ment Upon the Ag ency Record

is gr anted in par

t, and this action is re m an d ed t o the Commiss ion for fur ther proc eeding s not

inconsistent with this opinion.

I. The F ac ts of The Ca se

A s t h e C o m m i s s i o n n o w s e e s i t , t h e a n t i d u m p i n g i n v e s t i g a t i o n o f i m p o r t s o f p o l yv i n yl

a lc oh ol ( “P VA”) fro m T a iw a n a t is su e he re “ pit te d .

. . tw o .

. . [le a din g ] dom e sti c pr od uc e rs – 2

indeed the only

produce rs that supply

to the U.S. c ommercia l ma rket – ag ainst one another .” De f.’s

Br ief a t 2. I n its S eptember 2004 petition trigg ering that investiga tion, Ce l an ese a lleg ed that the

domestic industry

– which Celane se soug ht to define to include only itself – was mate rially

injured

or threa tened with mater ial injury by rea son of imports of PVA from Ta iwan.

A. Prior Antidumping I nvestig ations

PVA had bee n the subject of a ntidumping investig ations befor e. The first antidumping

petitions ag ainst PVA i m p o rt s wer e filed in 1995, by Air Products and Chemica ls, I nc. (the

pr e de c e sso r o f C e la ne se ). Th e Com me rc e De pa rt me nt s ub se qu e ntl y

pu bli sh e d a nti du mp ing du ty

or de rs a g a ins t PV A i mpo rt s f ro m Ch ina , Jap a n, a nd

Ta iw a n, in l a te Ma

rc h 1 99 6. Ho we ve r, tho seCou rt N o. 04- 0059 4 Pag e 4

order s were revoke d eff

ective May 14, 2001, due to dom estic produc ers’ failure to participate in the

five-y ear sunset revie ws. Staff Repor t at I -3.

I n ear ly September 2002, Cela

nese a nd DuPont filed a second series of antidumping pe titions

– this ti me, ag ainst PVA imports from China, Germa ny , J apan, a

nd Kore a. The 2002 petitions

re su lte d in

the iss ua nc e of a n a nti du mpi ng du ty or de r a g a ins t PVA imp or ts f ro m Jap a n in

e a rl y July

2003. Antidumping duty order s ag ainst PVA imports from China and Kore a followe d three months

later. Staff

Report at I -3 to I -4. The Commi ssion incorporated “certa in public fac tual finding s and

analy sis from these pre vious investigations . . . i ncluding information about the pr oduct, purc hasing

behavior
, the dom estic and fore ign pr oducer s, and other c onditions of competition . . . int o the re cord

of this investiga tion.” Preliminary Deter mination at 7; Conf. Com m. Views at 10.

I n this action, Celanese makes much of the fa ct t hat t he P eriod of I nvestig ation (“POI ”) f or
the proc eeding here at issue (full ca lendar y ear s 2001, 2002, and 2003, and the first half of 2004)

overla ps for two y ear s with the 2003 investiga tions (which cove red f ull calenda

r y ear s 2000, 2001,

and 2002). Pl.’s B rief a

t 6. The Commissi on and De fenda nt-I nterven o rs , in turn, emphasize the

differ ence s betwee n the two investig ations – the y ear and a ha lf that do not overla p, as well as the

differ ent subject c ountries. Def .’s B rief at 61-64; Def.- I nts.’ Br ief a t 45-49.Cou rt N o. 04- 0059 4 Pag e 5

Commerce ide ntified the imported mer chandise within the scope of the inves tiga tion as 3 consisting of all PVA products “hy drolized in excess of 80 perc ent, whether or not mi x ed or diluted wi t h co m m er ci al l ev els of def oamer or boric a cid. PVA in fiber f orm is not included. . . . The

merc handise unde r investig ation i s currently classifiable under subhe ading 3905.30.00 of the Ha rm on ize d T a ri ff

Sc he du le of

the Un ite d St a te s ( “ HT SUS ” ). Al tho ug h th e HT SUS su bh e a din g is provided for

convenie nce a

nd customs pur

poses, the written descr iption of the merc handise unde r investiga tion is dispositive.” I nitiation of Antidumping Duty I nvestig ation: Poly viny l A lcohol from Taiwa n, 69 Fe d. Reg . 59,204 (Oc t. 4, 2004). B. The I nvestig ation At I ssue

The instant ac tion involves an antidumping pe tition aga inst P VA imports from Taiwa n, 3

which Celane se filed in ea rly September 2004, a n d wh ich fe llow domestic produce r DuPont

opposed. As the initial step in a preliminary injury investiga tion, the Commiss ion first defines the

“domestic like produc t” and the “industry .” The Commi ssion declar ed a “ single domestic like

product de fined co ex t en s ively with [ the] scope of the inve stiga tion” to consist of “all PVA

hy d rolized in ex cess of

80 perc ent, whethe r or not mix ed or diluted with commer cial leve ls of

defoa mer or boric acid, but not including PVA in fiber f orm.” Preliminary

Deter mination at 7-8, 11;

Conf. Comm. Views at 10-11, 15.

Th e Com mis sio n de fi ne d the do me sti c ind us tr y a s all pr od

uc e rs of the do me sti c lik e pr od uc t:
petitioner Celane se; E.I . du Pont de Nemours and Co. (DuPont); and a third produce r, Solutia I nc.
(S olu tia ). Pr e lim ina

ry De te rm inatio n a t 11 ; Co nf . Co mm. Vi e ws a t 10 , 1 6. Onl y on e fi rm ,
defe ndant-interve nor Chang Chun PetroChemical Co., L td. (“CCPC”), is known to have produc ed

PVA in Ta iw a n du ri ng the pe ri od of inv e sti g a tio n. Pr e lim ina ry De te rm inatio n a t 8; Con f. Com m.

Views a t 10-11.Cou rt N o. 04- 0059 4 Pag e 6

Th e Com mis sio n d id n ot e xclu de a ny pa rt y un de r t he re la te d p a rt ie s p ro vis ion of the Ac t,
19 U.S.C. § 1677(4)(B ) (2000) . Preliminary Deter mination at 12-14; Conf. Comm. Views at 17-20.

The Commiss ion considere d whether to exclude DuPont who, in addition t o producing PVA

do me sti c a lly , a lso imp or

te d s ub je c t PV A f

ro m T a iw a n d

ur ingthe pe ri od

of inv e sti g a tio n. Ce la ne se

arg ued that DuPont should be consider ed a rela ted party due to its imports of PVA from Taiwa n and

its relationship with CC PC. Howeve r, while the Commi ssion f ound DuPont was a re lated par ty by

vir tue of its imp or ts of PVA fr om Ta iw a n, it did no t fi nd a ny dir e c t or ind ir e c t c on tr ol r e la tio ns hip

betwee n DuPont and CCP C. Pre liminary Deter mination a t 13; Conf. Comm. Views at 18. I n the

end, the Commission conclud ed i t wa s not appropria te to define the domestic industry to exclude

DuPont, based on, int e r a lia , th e c omp a ny ’s “ sh a re of do me sti c pr od

uc tio n, the ratio of

its imp or ts
to such production, and the impact of its importing on its domestic production operations.” De f.’s

Br ief a t 11 ( citing

Conf. Comm. Views at 17-20).

O f th e th r e e k n o w n p r o d

u c e r s o f PV A in th e U n it e d

St a te s , p la in ti f

f Ce la n e s e is th e [ ]

domestic produce r of PVA; def endant- intervenor

DuPont is t he [ ] U.S . produce r; and

Soluti a produc es PVA as part of a vertica lly integ rate d production proce ss of PVB, a downstream
product of PVA. Pl.’s B rief at 9 ( citing Con f. Com m. V ie ws a t 20 n. 85 ); se e als o P re l i m i nary

Deter mination at 14 n.85.

I n t h e course of its investiga tion, the Comm ission st aff collecte d questionnaire r esponses

from all the domestic produce rs. Preliminary Deter mination at 7; Conf. Comm. Views a t 10. The

staff a lso collected da ta from importer questionnaire response s (which they estimate cove red more

than 90% of PVA imports f rom Taiwa

n), as well as from questionnaire response s from CCP C, theCou rt N o. 04- 0059 4 Pag e 7

The Commission based its depression finding on the fa ct that the domestic industry had bee n 4

a ble to ra ise pr ic e s in the mor e re c e nt pe ri od de sp ite inc re a se s in the vo lum e of su bje c t impo rt s. Conf. Comm. Views at 6. Taiwa nese pr oducer . Staff Report a t I -2 , Tables C-1 a nd C-2. I ndeed, the only information the

Commi ssion claims it was un able to obtain is ce rtain financ ial information from Cela nese,
notwithstanding re peate d reque sts. Prelimi nary Deter mination at 4; Conf. Comm. Views a t 5; St aff

Report at VI -4 to VI -7. Celane se disputes that claim, asser ting that it responded to all re quests for

information. Pl.’s Reply Br ief at 2 4 n

. 7 1

. I n any case , Celanese say s its quarrel is with the

Commi ssion’s analy sis of the information it ha s on rec ord, and that it ha s never claimed the la ck of

any cost information as a

rea son to continue the investig ation. Id.

I n brief, the Commi ssion found that the rec ord as a whole contained clea

r and c onvincing

evidenc e that the domestic PVA industry was not mater ially

injured or threatene d with material

injury . Of the thre e domestic produc ers, only two supply

the commer cial m ar k et: Celanese , the

plaintiff; and De fenda

nt-I nterve nor

D u Pont, who opposes the petition and imports certa in PVA from

Taiwa n. Preliminary

Deter mination at 4-5; Conf. Comm. Views at 5-7.

The Commission found th at t h e v olume of subjects imports was sig nificant, but found no

e vid e nc e to s up po rt

sig nif ic a nt p ri c e e ff

e c ts, a dv e rs e imp a c t, o r th rea t. A lth ou g h s ub je c t im po rt s

inc re a se d o ve r t

he POI , s o d id dom e sti c c on su mpt ion

. Th e Com mis sio n als o fou nd that th e do me sti c
industry ’s share of the mer chant a nd total U.S. PVA markets incre ased, a nd – throug hout most of

the POI – non-subject imports acc ounted for a larg er marke t sha re tha n subject imports. Acc ording

to t he Com mis sio n, the re c or d a lso ind ic a te d n o s ig nif ic a nt p ri c e un de rs e lli ng by su bje c t im po rt s;

no r w a s any sig nif

ic a nt pr ic e de pr e ssi on

e vid e nt. Mo re ov e r, de sp ite e vid e nc e of a n in du str

y c os t- 4Cou rt N o. 04- 0059 4 Pag e 8

price squeeze, the Commission found no significa nt price suppression. Preliminary Deter mination

at 4-5; Conf. Comm. Views at 5-7.

I n finding no evidenc e of a dverse impact, the Commissi on noted that there had bee n declines

and improveme nts in the domestic industry ’s per formanc e fa ctors. “B etwee n 2002 and 2003, when

subject imports . . . experience d their larg est rela tive volume incre ases, domestic pr oducer s g ained

so me ma rk e t sh a re , in c re a se d p ro du c tio n, inc reased th eir c a pa c ity uti liza tio n, inc re a se d U .S.

sh ipm e nts , c on tin

ue d to e xpe ri e nc e de c lin ing inv e nto ri e s, a nd e xpe ri e nc e d inc re a se d d ome sti c un it

sales value s.” Preliminary Deter mination at 5; Conf. Com m. Views at 6-7.

After antidumping duty

order s were imposed on PVA imports from China, Kore a, and Japan

in mid to l ate 2003, “ the domestic industry ’s per formanc e for interim 2004 was at leve ls that were

better tha n or similar to levels in interim 2003 for many of these same fac tors” despite the incre asing

subject imports from Taiwa n. Preliminary

Deter mination at 5; Conf. Com m. Views at 6-7.

Celanese char g es that t h e C ommissi on “miscalc ulated the subjec t and non-subjec t import

volumes” in such a wa

y as to oversta te the volume of non- subject imports, while understa ting the

volume of subj ect imports. Pl.’s Br ief at 12. Celanese also takes issue with the da ta the Commissi on
relied on to find: a) no signific ant patter n of underselling; b) attenuated c ompetition between subjec t
imports and domestically produce d PVA ; an d c) no price e ffe cts. Id. Celanese asser ts that a) the

data f or under selling w as not cre dible; b) the attenua ted co m p et i t i o n finding was ba sed on a

misreading of customer

questionnaire r esponses; and c) the price eff ects finding was ba sed on the

above me ntioned faulty

volume calc ulations and flawe d pricing information. Id

.Cou rt N o. 04- 0059 4 Pag e 9

Fur ther, Celane se ar g ues that the Commission applied an improperly hi gh t hreshold of

c a us a tio n in its inj ur y a na ly sis . A nd , f

ina lly , Ce la ne se a rg ue s t hat the Com mis sio n “ imp ro pe rl y
relied on, inte r a lia , self-c ontradictory and unexplained evidenc e” f rom the Taiwa

nese pr oducer
,

CCP C, to find no threat of mate rial injury . Pl.’s Brief at 13.

The Commission and Defe ndant-I nterve nors, in turn, vi go rousl y dispute Celanese ’s

alleg ations, char acte rizing them as an attempt to g et the Court to r ewe igh the evidenc e in a manne r

more fa vorable to Celanese. See Def .-I nts.’ Br ief a t 17-19; Def.’ s Br ief a t 3 (desc ribing Celanese ’s

claims as “la

rg ely fac tual in nature, r aising the sort of evide nce- weig hing que stions appropriate f or

consideration by

the Commiss ion in its capa city as fa ct-finde r but not for t h i s C o urt in its review

function”) , 47, 72.

II. The P r oc e dur al H ist or y o f The Ca se

I n its petiti on filed with th e U. S

. Depa rtment of Commerce and with the Commissi on,

Ce la ne se a lle g e d th a t an ind us tr y in t he Un ite d St a te s w a s ma te ri a lly inj ur e d a nd thr e a te ne d w ith

further materia l injury by rea son of less than fa ir value imports of poly viny l alcohol (“ PVA”) f

rom

Ta iw a n. Com

pla int ¶ 5 ; se e als o P o l y

v i n y l Al co h o l fr o m T ai wa n , 6 9 Fe d

. R eg. 55,653 (Sept. 15,

2004) (notice of re ceipt of pe tition and ini tiation of i nvestig ation); Poly viny l Alcohol from Ta iwan,

USI TC Pub. 3732, I nv. No. 731-TA- 1088 (Prelim.) (Oc t. 2004) (“Pre liminary Deter mination”)

.

U p o n r e c e i p t o f

C e l a n e s e ’ s p e t i t i o n , t h e C o m m i s s i o n i n i t i a t e d i t s i n v e s t i g a t i o n , P o l yv i n yl

Alcohol Fr om Taiwan, I nv. No. 731-TA- 1088 (Preliminary ). See Poly

viny l Alcohol from Ta iwan,

69 Fe d. Reg . 55,653 (Sept. 15, 2004). Within a matter of wee ks, the Commis sion held a pre liminaryCou rt N o. 04- 0059 4 Pag e 10

confe renc e, af

ter whic h parties to the pr ocee ding f iled post-confe renc e briefs w ith the Comm ission.

Pl.’s Brief

at 4.

Up on c omp le tio n of the pr e lim ina ry inv e sti g a tio n, the Com mis sio n de te rm ine d by a 3- 2 v ote

that there was no re asonable indication that an industry was be ing ma terially

injured or wa s

threa tened with mater ial injury wi thin the meaning of 19 U.S.C. § 1673b(a) by rea son of subject

imports of PVA from Taiwa n. See Poly

viny l A lcohol from Taiwa n, 69 Fe d. Reg

. 63,177 (Oc t. 29,

2004) (notice of pre liminary deter mination). Acc o rd ingly , the ag ency investiga tions were

terminated. See 1 9 U.S .C. § 1673b(a)( 1) (“ I f the Commission finds t hat imports of the subject

merc handise are neg ligible or otherwise makes a ne g ative dete rmination under this para g raph, the

investiga tion shall be terminated.” ).

III. Stand ard of Review

I n revie wing a challeng e to a neg ative preliminary injury deter mination by

the Commiss ion

in an antidumpi ng case , “[t] he cour t shall hold unlawful any

deter mination, finding, or c onclusion

found . .

. to be arbitrary
, capr icious, an abuse of discre tion, or otherwise not in ac corda nce w ith law

. . . . ” 19 U. S.C. § 1 51 6a (b )( 1) (A ); se e als o Co-Steel Raritan, I nc. v. United States, 357 F .3d 1294,

1309 (F ed. Cir. 2004). The “ar bitrary and ca pricious” standa

rd re quires that the Commission

“examine the re levant data and ar ticulate a sa tisfactory explanation for its action including a ‘r ational

connec tion between the fac ts found and the c hoice made .’” Mot. Ve hicle Mfr s. Ass’n v. State Fa rm

Mut. Auto. I ns. Co., 463 U.S. 29, 43 (1983) ( citing B ur lin g ton

Tr uc k L ine s, I nc . v . U nit e d St a te s,
371 U.S. 156, 168 (1962)).Cou rt N o. 04- 0059 4 Pag e 11

IV . A nal ys is

Cle ar an d Co nv inc ing

Ev ide nc e Sta nd

ar d

I n a pre limina

r y in jur y deter mination, the Comm ission “has consistently viewed the statutory

‘re asonable indication’ standar d as one r equiring that it issue a neg ative dete rmination . . . only when

(1) the r ecor d as a w hole contains c lear and convinc ing e vidence that there is no material injury or

threa t of such injury ; and (2) no likelihood exis t s t h at contrary evidenc e will arise in a final

investiga tion.” Am. L amb Co. v. United States, 785 F.2d 994, 10 0 1 (F ed

. C i r. 1986). Mater ial

injury is defined a s “har

m which is not inconsequential, immateria l, or unimportant.” 19 U.S.C. §

1677(7)( A) (1996)

.
Cel an es e d isputes a number of the Commiss ion’s individual findings as not supporte d by

clea r and c onvincing evidenc e. See Pl.’s Brief at 28 (a rg uing tha t Commi ssion’s finding s on pricing

for c erta in products “a

re not supporte d by

clea r and convincing evidenc e on the rec ord as a whole”) ;

se e als o Pl. ’s B ri e f a t 27
, 59
, 63 ; Pl. ’s Re ply B ri e f a t 2- 5, 17
, 19
, 20 -2 3, 28 -2 9. Ho we ve r, Ce la ne se

misstates the standard for a neg ative pre liminary deter mination. I t is not t hat ea ch piec e of e vidence

mus t be ba se d u

po n c le a r a

nd c on vin c ing e vid e nc e , but – ra the r – tha t “ the re c or d a s a wh ole c on ta in

c le a r a nd c on vin c inge vid e nc e that the re is no ma te ri a l in jur y .” Con n. Ste e l Co rp . v . U nit e d St a te s,

18 CI T 313, 315-316, 852 F . Supp. 1061, 1064 (1994) ( citing Am. L amb Co., 785 F.2d at 1001).

Celanese also identifi es numerous f indings whic h it asserts ar e base d on less than

co m p re h en s i v e e v i d en ce o r fo r wh i ch co n t ra d i ct o ry ev i d en ce ex i s t s , an d ar gu es t h at t h o s e f

i n d i n gs

inhere ntly fail to meet the c lear

and convinc ing e vidence standard a nd, thus, require further

investiga tion. See Pl.’s Br ief at 27-28, 34, 67; Pl.’s Reply Br ief at 17 (a rg uing tha t any

finding basedCou rt N o. 04- 0059 4 Pag e 12

Celanese is refe rring to information about lost sales/lost revenue d escribed by the 5 Commi ssion as “consistent with other evidence offe red by DuPont.” Pl.’s Brief

at 17 ( citing Def

.’s Br ief a t 47, quoting Conf. Comm. Views at 12). Celane se claims that it is unclea r to what evidenc e the Def endant’ s Br ief is ref

err ing, and sug g ests the re fer ence may be to either

testimony

by Kathy McCord at the pr eliminary confe renc e (w hich i t claims would then be c ontradicte d by her te stimony in 2003) or to the tra

nsaction re port offe red by DuPont as an appe ndix to its P ost-Confere nce B rief (which Cela

nese c laims supports its contention that price is “ the major competitive fac tor and thus thoroug hly

contra dicts McCord’s conf ere nce te stimony ”). Id.

A closer rea ding su gges t s t h at it is not so difficult as Celane se sug g ests to determine the evidenc e to which the Commi ssion is ref err ing. Def

endant’ s Br ief c ites this comment to the Conf. Comm.’s Views at 40 which lists examples of such evidenc e offe red by DuPont r eg arding non-price fac tors including its ques t i o n n ai re r esponses a nd specific Post-Conferenc e B rief E x hibits which include its transactions re ports among other sourc es. De f.’s B rief a t 47 ( citing

Conf. Comm. Views at 40 n.179 ( citing Sta ff Re po rt a t I I -1 3 to I I -1 4, V- 12 to V- 14 ; Pre lim ina ry De te rm inatio n at I I -8 to I I -9 ; D uPo nt Post -C on fe re nc e B ri e f, C.D . 19, a t Exhibi ts 5, 6, 7) ). Th is issu e is ad dr e sse d mo re fu lly below. on evidenc e “twic e contr adicted ... c annot meet the c lear and convincing standard) ; see also id. at 5

3-5, 7, 11-13, 28- 30. L eaving aside the f act that not ever

y piece of evide nce must mee t the clea r and

convincing standard, it is assure dly within the Commi ssion’s a uthority to “ weig h all th e evidence

a nd re so lve c on fl ic ts i n th e e vid e nc e .” Con n. Ste e l Co rp ., 18 CI T a t 31 5, 85 2 F . Su pp . a t 10 64 ; see

also Am. L amb Co., 785 F.2d a t 1002-04.

Causation

I n a pre liminary

injury deter mination, the Commission is require d to determine, ba sed on the

information ava ilable to it at the time of t he determination, whether there is a rea sonable indica tion

t h a t a n i n d

u s t r y i n t h e U n i t e d

S t a t e s i s ( i ) m a t e r i a l l y i n

j u r e d o r ( i i ) t h r e a t e n e d

w i t h m a t e r i a l i n

j u r y,
by re as on of imports of the subject m erc handise. 19 U.S.C. § 1773b(a)

. Celanese would arg ue that

this means that unless the ef fec t of subject im ports is found t o be tang ential, incidental or trivial, the

Commi ssion must find causa tion. Pl.’s Br ief at 60 ( citing Nippon Steel Corp. v. United States, 345Cou rt N o. 04- 0059 4 Pag e 13

F.3d 1379, 1381 (F ed. Cir. 2003) (“{D }umping need not be the sole or principal cause of injury

. As

long as its e ffe cts are not me rely incidental, tang ential, or trivial, the fore ign like product mee ts the

causa tion requireme nt.”)).

Ce la ne se a dd s th a t th e le g a l sta nd a rd s a pp lie d by the Com mis sio n a re “ dir e c tly c on tr a ry ” to

the Statement of Administrative Ac tion (“SAA”) acc ompany ing the Trade Ag ree ments Act of 1979,

which spec ifically

states that “th e C o m m i ssion is not to ‘weig h cause s.’” Pl.’s B rief at 61 ( citing

Sta te me nt o f A dmi nis tr a tiv e Ac tio n, Tr a de A g re e me nts Ac t of 19 79 , S. Re p. 96 -2 49 a t 75 (Jul y
1979)).

Celanese is corre ct that it does not need to show that the subje ct imports are the sole, or e ven
the major, c ause of

injury . Howeve r, its selective quotations from the Commission’s Prelimi nary

Deter mi n a ti o n

– f

o r e xa mp le
, “ ‘ w h il e p r ic e is a n im p o r ta n t f a c to r , o th e r f

a c to r s w e r e im

p o r ta n t’ .

. . ‘fa ctors other

than price wer e rel ev an t ’

. . . fac tors other than subjec t imports ‘contributed

materia lly ’”– do not show t h at the Commissi on failed to a pply the prope r standar d of ca usation,

much less that the C ommissi on “ra ised the t hreshold for finding materia l injury . . . far bey ond that

require d by

law” by “improper ly

attributing too much importanc e to fa ctors other than the substantial

volumes of subject imports that wer e being sold at less-than-f air-va lue.” Pl.’s Brief a t 60 ( quoting

Preliminary

Deter mination at 32, 39, 47).

Mo re ov e r, Ce la ne se ’s re lia nc e on Ni pp on is m isp la c e d. Ni pp on its e lf c ite s G e ra ld M e ta ls,

I nc

. v. Un ite d Sta te s, 13 2 F .3 d 7 16 , 7 21 -2 3 ( F e d. Cir .1 99 7) , w hic h p oin ts o ut t ha t th e F e de ra l Cir c uit

ha s n e ve r a do pte d th e SAA “ no n- de min imu s” me tho do log y a nd that, in f a c t, b y -r e a so n- of

a na ly sis

may require the weig hing of fac tors. See Ger ald M etals, 132 F.3d at 722 (finding that “evide nce ofCou rt N o. 04- 0059 4 Pag e 14

de minimis causation o f i n j ury does not rea ch the c ausation leve l require d under the statute”).

Contrary to Celanese’ s assertion, the Commi ssion doe s not ha ve to sta te outrig ht tha t it found subjec t
imports to be “incidental, tang ential, or trivial.” See Pl.’s Reply Br ief a t 28.

A. Vo lum e of

I mpo rt s

Un de r t he sta tut or

y re g ime , th e Com mis sio n mus t de te rm ine the sig nif ic a nc e of the vo lum e
of subject imports from Taiwa n, including a

ny incre ase in that volume, both in absolute ter ms and

re l at i v e t o p ro d

u ct i o n an d co n s u m p t i o n i n t h e Un i t ed S t at es

. 1 9 U. S

. C

. § 1 6 7 7 (7 )( C )( i ). Al t h o u gh

the Commiss ion did find the actua l volume of subject imports and the incr ease in that volume over

the per iod of investigation to be significa nt, it nonetheless found volume did not have a signific ant

i m p a c t o n t h e d o m e s t i c m a r k e t

. P r e l i m i n a r

y D e t e r m i n a t i o n a t 2 2 ; C o n f

. C o m m

. V i e w s a t 3 3

. In

summary , the Commiss i on found 1) U.S. mar ket consumption increa sed over the POI ; 2) the

domestic industry ’s share of the mar ket incre ased; a

nd 3) non-subject imports of PVA held a lar g er

marke t share tha

n subject i m p o rt s fr o m Taiwan f or most of the POI but lost m arke t share a fter

be c omi ng su

bje c t to the 20 03 a nti du mpi ng or de rs . Pr e lim ina ry De te rm inatio n a t 22 ; Co nf . Co mm.

Vi e ws a t 33 -3 4. Mo re ov e r, the Com mis sio n fou nd that des pit e the de c lin e in n on -s ub je c t im po rt s

towards the e nd of the POI , “subjec t imports did no t s ee m t o take a dvantag e of this opportunity .”

Prelimi n ar y

Deter mination at 23; Conf. Com m. Views at 34. To support this statement, the

Commi ssion e x plained that marke t sha re levels for subject imports in interim 2004 and interim 2003

wer e similar and not much hig her tha n their marke t share in 2001, “ when they wer e cove red by

an
antidumping duty order for the first five mont hs of the y ear .” Preliminary Deter mination at 23; Conf.

Comm. Views at 34.Cou rt N o. 04- 0059 4 Pag e 15

Ce la n e se disputes the data

on which the Commission relied to calcula te the volume of subjec t
and non-subjec t imports and their respe ctive mar ket share s, as wel l a s the domestic industry ’s marke t

sh a re pe rf or ma nc e , ass e rt ing that the Com mis sio n both un de rs ta te s the vo lum e of su bje c t im po rt s

and over states the volume of non- subject imports. Se e ge ne ra lly Pl. ’s B ri e f at 16 -2 4. Ce la ne se

a rg ues tha t pr op e rl y

c a lc ulate d th e da ta

ind ic a te s su

bje c t im po rt s o ve rt oo k n on -s ub

je c ts i mpo rt s

toward the end of the investiga tion ( afte r the antidumping duty order was imposed on China, Kore a
and Japan in mid to l ate 2003) and that U.S. produc er sha re di d n o t i ncre ase but in fa ct re mained

static. I n the view of

Celanese the “c orre cted” data, discusse d inf ra , indi c a te s subj e c t im

po rt s d id

in fac t take adva

ntag e of the opportuni ty

prese nted by

the antidumping or ders f

or China, J apan, a

nd

Kore a in mid to late 2003 and the U.S. pr oducer share rema ined static – a ve ry differ ent trend tha

n
that cited by

the Commiss ion to support its finding that volume of subject imports did not have a

signific ant ef

fec t on the domestic industry . Pl.’s Brief at 16-24.

1. Sub je c t I mpo rt s

To deter mine the volume of subject imports, the Commi ssion use d importer questionnaire

data. Cela

nese c laims that the C ommissi on err ed by calc ulating the volume of subject imports (that

is, imports from Taiwan) u s i n g importer questionnaire data that wa s “less than c omplete.” See

generally Pl.’s Br ief at 2, 12, 18-19; Pl.’s Reply Br ief at 5-6, 9-10. Celanese asser ts that the importer

questionnaire data “under stated [subj ect imports] by about 10 perc ent,” and contends that theCou rt N o. 04- 0059 4 Pag e 16

Ce la n e s e r e a s o n s th a t, b e c a

u s e CC PC is th e o n ly kn o w n T a iw a n e s e p r o d u c e r of subject 6

merc handise, CCPC’s shi pment data r epre sented 100% of subject imports. See Pl.’s Brief at 19. Commi ssion should have used off icial Census statistics or data fr om CCP C’s fore ign pr oducer

questionnaire r esponse instea d. Pl.’s Brief at 18-19; Pl.’s Reply

Br ief a t 9-10. 6

Ac c or din g to Ce la ne se , the Com mis sio n’ s us e of the imp or te r q ue sti on na ir e da ta

to c a lc ulate
the volume of subjec t imports – toge ther with the ag ency ’s use of una djusted data to ca lculate the

vo lum e of

no n- su bje c t im po rt s ( dis c us se d in

se c tio n A .2
, be low ) – ha d a de c isi ve imp a c t on

so me
of the Commission’s key finding s. See ge nerally Pl. ’s B ri e f at 2- 3, 12 , 1 9- 24 , 4 8, 64 -6 5; P l.’ s Re ply

Br ief a t 5-6, 9-10, 30.

As a threshold matter, there is no presumption favor ing the use of officia l gove rnment import

statistics s u ch as C en s u s d at a, or – f or that matter – a

ny other set of

data. The use of importer

questionnaire data t o calc ulate subj ect import volumes is a we ll-established and a cce pted pra ctice.

See
, e.g. , Allura Red Coloring from I ndia, I nv. Nos. 701-TA- 433 (Preliminary ) and 731- TA-1029

(Preliminary

), Pub. No. 3595 at 10 (Apr il 2003), aff’d , Sensient Tec hs. Corp. v. United States, 28

CI T __, 2004 WL 2030258 (2004) (n oti ng Com mis sio n r e lia nc e on imp or te r qu e sti on na ir e da ta

in

import volume calc ulations); B last Fur nace Coke from China and J apan, I nv. Nos. 731-TA- 951-952

(Preliminary

) (Remand)
, Pub. No. 3619 at 19-20 (Aug . 2003) ( citing Bla st Furna ce Coke from China

and Japan, I nv. Nos. 731-TA- 951-952 (Pre liminary), Pub. N o

. 3 4 4 4, Tables I V-2, I V-6, a nd C-1

(Aug . 2002), aff’d
, C o m m

. f o r F a i r C o k e T r a d e v

. U n i t e d

S t a t e s , 2 8 C IT __, __, 2004 WL 1615600

a t * 1 6 ( 20 04 ) ( su sta ini ng Com mis sio n r e liance on imp or te r q ue sti on na ir e da ta

in i mpo rt vo lum e

calc ulations). There is thus nothi ng inhere ntly wrong with the Commi ssion’s relianc e on importerCou rt N o. 04- 0059 4 Pag e 17

The Gove rnment finds it telling that “ Celanese opts not to show the Court the actual scope 7 of c ov e ra g e ” fo r the imp or te r qu e sti on na ir e da ta

a s c omp a re d to the of

fi c ia l Ce ns us B ur e a

u s ta tis tic s. Th e Go ve rn me nt e mph a size s th a t th e qu e sti on na ir e da ta ov e rs ta te d of fi c ia l Ce ns us sta tis tic s in

so me y ear s an d u n d er s t at ed them in others, a nd that – over the rele vant Period of I nvestig ation – “[t] he

a ve ra g e fo r c ov e ra g e of

of fi c ia l st a tis tic s b y

qu e sti on na ir e da ta ” wa s muc h clo se r to 100 % tha n to 90%. See Def

.’s B rief at 26. questionnaire data in its subject import volum e ca lculations in this case. See ge nerally Def .-I nts.’

B ri e f at 26 -2 7; see also Def .’s B rief at 25.

Mo re ov e r, Ce la ne se ov e rs ta te s its ca se wh e n it c la ims that th e imp or

te r q ue sti on na ir e da ta

“under stated [subject imports] by about 10 per cent.” See Pl.’s Brief at 19. I n fac t, the Staff Report

is clear that the importer que stionnaire data actua lly “ac count[ed] for we ll o v e r 90 perc ent” of the

imports from Taiwa

n. See Sta ff

Re po rt a t I V- 1 ( e mph a sis a dd e d) ; se e als o id . at I -2. Thus, the g ap

is not as g rea t a s Celanese tries to sugg est. See ge nerally Def .-I nts.’ Br ief at 25-26; Def .’s B rief a t

26. 7

Ev e n s o, Ce la ne se c or re c tly no te s th a t th e c ov e ra g e va ri e d fr om [ ] in

20 01 to [ ] in

interim 2004 and thus the understate ment was most pronounc ed in the period a fter imposition of the

2003 antidumping duty

on imports from China, Korea , and Japan. Pl.’s Reply Br . at 9-10 ( citing

De f. ’s B ri e f at 26 ). Mo re ov e r, Ce la ne se a sserts th at this f a c t, t og e the r w iththe a sse rt e d e rr or in

c a lc ulatin g no n- su

bje c t im po rt s d isc u s s e d

i n s e c t i o n A

. 2 b e l ow , is sig nif

ic a nt e no ug h to re ve rs e so me
of the Commission’s key

finding s. Id.

Even if it wer e no g rea ter than 90% (as Celanese has claimed), t he questionnaire data’ s scope

of cove rag e mig ht well be suff iciently compre hensive. See
, e.g. , Comm. for Fa ir Coke Tra de, 28

CI T at __ n.24, ___, 2004 WL 1615600 at * 14 n.24, ** 15-16 (sustaining Commi ssion’s neg ativeCou rt N o. 04- 0059 4 Pag e 18

preliminary

deter min at ion where import volume findings we re ba sed on importer que stionnaire

response s acc ounting f

or appr ox imately

80% of imports from China a nd virtually

all imports from

J apan) ; Torring ton Co. v. United St ates, 16 CI T 220, 222-23, 790 F. Supp. 1161, 1166 (1992), aff’d
,

991 F.2d 809 (F ed. Cir. 1993) (sustaining Commi ssion’s neg ative pre liminary deter mination where

impact finding s were based on r esponses of 25 of 51 fi rm s , whi ch ac counted f or 74% of

total

shipments by

quantity and 68% by

value)

. See ge nerally Def .’s Br ief at 26-27; Def

.-I nts.’ Br ief a t

27-28.

At bottom, C elane se’s challeng e to t he Commissi on’s ca lculation of the volume of subje ct
imports is predicated on the premise that, confr onted with thr ee somewhat diff ere nt sets of data, the

Com mis sio n ir

ratio na lly ig no re d tw o p e rf

e c t set s of da ta a nd ins te a d ch os e to use the on e se t of da ta

that w a s fla

we d. Ho we ve r, the re c or d ind ic a te s tha t the Com mis sio n f ou nd no ne of the thr e e se ts

of data to be per fec t. As Celanese emphasizes, the Commiss ion candi d l y ac k n o wl edg ed that the

scope o f co v era g e of the importer questionnaire data wa s less than 100%. The Commi ssion

never theless used those da ta in calc ulating subje ct i mport volume, based on its determination that

the importer que stionnaire data wer e more reliable than the other data that wer e ava ilable (a nd which

Celanese favor s). See Sta ff Re po rt a t I -2 & n. 5, I V- 1 & n. 2; see ge nerally Def .’s B rief a t 3-4, 27;

Def .-I nts.’ Br ief a t 25.

For example, in its opening brief, C el an es e co ntends that – in lieu of the importer

questionnaire da

ta – the Commissi on should have used data from C C P C ’s foreign pr oducer

questionnaire. See ge nerally Pl.’s Brief at 19. But, c ontrary

to Celanese’ s impli cation, ther e we re

pr ob le ms w iththat data a s we ll. Un lik e oth e r imp or t da ta se ts, fo re ig n p ro du c e r q

ue sti on na ir e da taCou rt N o. 04- 0059 4 Pag e 19

do no t a c c ou nt fo r vo lum e in te rm s of va lue

. An d, in te rm s of qu a nti ty , the re wer e only

“compa ratively minor varianc es” be tween the importer questionnaire data that the Commission used

and the f oreig n produce r questionnaire data that Cela nese a dvocate s. See D e f

. ’ s B r i e f a t 2 7

- 2 8

. It

is the re fo re pe rh a

ps no su rp ri se that Cela

ne se ’s re ply br ie f ap pe a rs to ab a nd on its a dv oc a c y

fo r u se

of the for eig n produce r questionnaire data.

Celanese ’s principa l co n t en t i o n i s t h at t h e C o m m i s s i o n s h o u l d h av e c al cu l at ed subj ect import

volume using Census import statistics, rather than importer que stionnaire data

. See ge nerally Pl.’s

Br ief a t 19; Pl .’s Reply

Br ief a t 9-10. But the Ce nsus statisti cs, too, wer e not without problems. As

the Sta ff Re po rt e xpla ine d, Ce lanes e its e lf sp e c if ic a lly c a uti on e d a g a ins t us ingCe ns us da ta to

me a su re su

bje c t im po rt vo lum e in v a lue te rm s; a nd Du Pon t ha d w a rn e d th a t th e Ce ns us da ta

re fl ec t ed clerica l error s by its Cus toms broker (w hich it was taking steps to corre ct). S ee Staff

Re po rt a t I -2 n. 5, I V- 1 n .2 ; see ge nerally Def .’s Br ief a t 27 ( citing

Petition, C .D. 1, at 27, 37 n.104;

DuPont’s Post -Confer ence Br ief, C.D. 19, at 18- 20).

Celanese does not dispute the exis tence of the problems cited by the Commi ssion. I nstead,

Ce la ne se as ser ts tha

t, t o th e e xten t r e le va

nt, tho se pr ob le ms h a d b e e n c ur e d b y the tim e that po stconfe renc e briefs had been filed with the ag ency

. See Pl.’s Brief at 19 n.45; Pl.’s Reply

Br ief a t 10.

To be su re , th e Com mis sio n h a s b ro a d s ta tut or y dis c re tio n to c ho os e the dat a on whi c h it

bases its determinations. See
, e.g. , Comm. for Fair Coke Trade
, 28 CI T at __, 2004 WL 1615600

a t * 1 6 ( no tin g dis c re tio n a c c or de d to Commi ssi on in c ho os ingda ta se ts) ; A me ri c a n B e a ri ng Mf rs

.

As s’ n v . U nit e d St a te s, 28 CI T _ _, __ , 3 50 F . Su

pp . 2 d 1 10 0, 1108 -0 9 ( 20 04 ) ( “ [W]he the r t o r e ly

pr ima ri ly on qu a nti ty da ta , v a lue da ta , or bo th
, to me a su re the sig nif ic a nc e of imp or t vo lum e isCou rt N o. 04- 0059 4 Pag e 20

prec isely the ty pe of decision that Congr ess has entrusted the I TC to make in light of the fac ts and

c ir c ums ta nc e s o f e a c h p a rt ic ula r c a se .” ). An d t he Co ur

t g e ne ra lly

is n ot at li be rt

y to s ub sti tut e its

judgme nt for that of the Commi ssion. See
, e.g. , Torring ton Co., 16 CI T at 226, 790 F. Supp. at 1167

(“[I ]t is not the Court’s function to decide tha t it would have ma de anothe r dec ision on the basis of

the evidenc e.”) ; Comm . for Fa i r C o k e Tra de, 28 CI T at __, 2004 WL 1615600 at * 3-4; Sensient

Tec hs. Corp., 28 CI T at __, 2004 WL 2030258 at * 8; Ranche rs-Cattlemen Ac tion L eg al Found. v.

Un ite d St a te s, 23 CI T 861 , 878 , 74 F. Sup p. 2d 13 53 , 136 8- 69 (1 99 9) (c ou rt “ c a nn ot s ub sti tut e its

jud g me nt

. . . fo r that of

the Com mis sio n, ” bu t on ly “ a sc e rt a in[s ] wh e the r t

he re wa s a

ratio na l ba sis

for the [Commis sion’s] determination”).

He re , ho we ve r, the re ha s be e n no pr of fe r to re sp on d to Ce la ne se ’s a sse rt ion that correc ted

Census data we re a

vailable to the Commission at the tim e it made its preliminary deter mination, and

should have be en used to c alculate s u b j ec t i mport volume. Nowher e, for example, has the

Gover nment (much less the ag ency itself) disputed Celanese ’s asser tion that the er

rors in the Census

data we re c orre cted be fore the Co m m i s s i o n re ache d its determination. Nor ha s there be en any
attempt to justi fy

the Commiss ion’s continued reliance on the importer que stionnaire data , if indeed

corr ecte d Census data we re a vailable f or use. Cf

. Calabrian Corp. v. United States, 16 CI T 342, 351,

794 F. Supp. 377, 386 (1992) (Commissi on must c onsider “the ‘best inf o rm at i o n available ’

contained in the r ecor d at the time of its deter mination”) ( cited in Def

.’s B rief at 21).

Gene rally , the Commiss ion’s use of importer ques t i o n n ai re da ta to calc ulate volume of

subject i mports would be well within ag ency ’s di scre tion. See Def .’s B rief at 25-28; Def.- I nts.’ Br ief

at 26-28. How ever , it is not clea r that the Commi ssion he re relied on the best information ava ilable.Cou rt N o. 04- 0059 4 Pag e 21

Calabrian Corp., 16 CI T at 351, 794 F . Supp. at 386 (the “ b est information ava ilable” standa rd

includes all informa tion, even informa tion not in t he staff report , i n t h e re cord a t the time of

Commi ssion’s determination). The Commi ssion has not denied it had the corre cted Census da ta at

the time of its decision. On re mand the Commissi on shall expl ain why the questionnaire response s

rema ined the best inf

o rmation ava ilable in light of the appar ent cor rec tions to t he er

rors c ited as

rea sons for not using Census data in the fir st instance.

2. No n- su

bje c t I mpo rt s

The Commission us ed off icial import data re ported by the U.S. Census Bure au (Census) for

Har moniz ed Tarif

f Schedule of the United States (HTSUS) subheading 3905.30.00 to determine the

volume of non-subject imports, i.e., imports from countries other than Taiwa

n. Staff Report a t I I -9.

See ge nerally Pl.’s Brief at 16-17. That subheading includes PVA of all hy droly sis levels, howeve r,
while the scope of the c u rr en t i n v estig ation includes only PVA with a hy droly sis level of 80% or

highe r. Pl.’s Br ief a t 16. Ba sed on the una djusted Census data, the Commission found non-subject

imports were the sec ond larg est source of supply for the U .S. domestic PVA market in 2003 af ter
domestic produce rs. Preliminary Deter mination at 17.

Celanese arg ues that b y u sing da ta that included out-of -scope products the Commission

overstate d the volume of n o n

- s u b je c t i mports which contributed to unde rstating the impact of subjec t
imports f rom Taiwa

n on the domestic marke t. Pl.’s B rief at 16-18. Celanese points out t hat in 2003,

while conduc ting investig ations into P VA fr om China, J apan a nd Kore a, the Commission adjusted

the Ce ns us da ta

to e xclu de non-s ub

jec t PVA f

ro m it s c a lc ulatio n o f n on -s ub je c t im po rt vo lum e s.

Pl.’s Brief

at 17. The Commission did not make a ny s u ch ad

j u s t ment in the instant case w hichCou rt N o. 04- 0059 4 Pag e 22

Cel an ese claims distorts t he data relied on by

the Commiss ion for its neg ative pre liminary injury

deter mination. Id

.
The Commission contends that “the total volume of out -of- scope PVA for all non-subjec t

countries wa s relatively

small” and would not have chang ed its de termination. Def .’s B rief a

t 32.

Moreove r, it contends t h at d iffer ence s in the respe ctive scope s of the investig ations justified the

adjustment in the 2003 investiga tions but do not requir e the a djustment here. De f.’s B rief a t 29-31.

The Commission not es that the s co p e o f t he 2003 investig ations included a list of 14 additional

specific exclusions m aking it much narrow er. Id . at 29.

Celanese arg ues that the C o m m i s s i o n ’s reliance on the differ ence in the scope of the

investigat i o n s fa i l s on two counts. First, Celane se asse rts that the ar g ument is a post hoc

ratio na liza tio n, no t me nti on e d in the Com mis sio n’ s V ie ws . Pl .’ s Re ply B ri e f at 9. Se c on d, Ce la ne se
claims that the distinctions drawn by the Commiss ion are larg ely illusory

. Celanese points out that

the list of 14 specific e x clusions consisted entirely of produc ts hy drolized in e x c e ss o f 8 0 p erce nt
while the adjustment for

“out-of-s cope” PVA excluded PVA hy drolized at less than 80 percent

. Pl.’s Reply

Br i ef at 8

. Whil e the Court ca n imag ine re asons why

narr owing the scope of an

investiga tion might justify excluding additional out-of- scope pr oducts which would other wise be

lum pe d u nd e r an HT SUS su

bh e a din g , as in the e a rl ie r i nv e sti g a tio n in qu e sti on , th e Com mis sio n d id

not g o that extra step and a rticulate its re asoning here . Bow man Tra nsp., I nc. v. Ar

k.-B est Fr eig ht

Sy s., 419 U.S. 281, 285-86 (1974) ( court may not “supply

a re asoned ba sis f

or the a g ency ’s ac tion

that the ag ency

itself has not g iven”) (citations omitted).Cou rt N o. 04- 0059 4 Pag e 23

Th e Sta ff Re po rt sta tes : “An un de te rm ine d b ut r e la tiv e ly sma ll s ha

re of imp or ts f ro m a ll 8 oth e r s ou rc e s c on sis ts o f P VA wi th a hy dr oly sis le ve l of 80 pe rc e nt or low e r. ” Sta ff Re po rt a t T a ble I V-1 n.1. Celanese simil arly

challeng es t h e C o mmissi on’s claim that the out-of -scope product wa s

neg ligible a

nd excluding it woul d not have a ffe cted its deter mination. Pl .’s B rief a

t 16-18.

Com pa ri ng the adju st ed d ata for

20 01 and 20 02 (t he o verl app in g y ears of t he i nv est igat io n) i nd ica tes,

acc ording to Celanese, tha t the volume of non-subjec t imports for PVA is overstated by

approximately

[ ] per cent and [ ] per cent respe ctively

. Pl.’s Brief at 17. Celane se also take s issue

with the Commi ssion’s c ontention tha t it did in f act c onsider the issue, noting that the only evidenc e

the Commiss ion points t o in support of this contention is a single se ntence in the Staff Repor t. Pl.’s 8

Reply Br ief a t 6 ( citing Def .’s B rief at 32). The Staff Report does not in fac t elabora te on how the

qu a nti ty of ou t- of -s c op e me rc ha

nd ise inc lud e d in

the Ce ns us da ta wa s e sti ma te d. Ce la ne se sim ila rl y
emphasizes that, in t h e 2003 investi g ations, the Commis sion ex cluded out-of -scope product fr om
two countries, a

nd arg ues that out-of- scope pr oduct should have be en excluded h er e as we l l

. See

Pl.’s Brief

at 19-20; Pl.’s Reply Br ief a t 6. The Commissi on notes that the re levant data from the

2003 investiga tions was business proprieta ry information, and ha s since bee n destroy ed. See Def .’s

Br ief at 32. But, logica lly
, that fac t has no bear ing on w hether the out-of- scope pr oduct at issue her e

wa s n e g lig ibl e , a s th e Com mis sio n c la ims

.
Celanese ar g

u e s th a t e xc lu d in g

the out-of- scope pr oduct would show that subject imports had

repla ced non- subject imports in 2003 a n d
, t h u s , “under mine the Commiss ion’s finding that nonsubject imports were the sec ond larg est source of supply in 2003.” Pl.’s Reply

Br ief a t 7.Cou rt N o. 04- 0059 4 Pag e 24

The Commission asserts that Celanese c oncede d in the 2003 investiga tions that its injuries

wer e not ca

used by dumped imports from Taiwa n. See D e f

. ’ s B r ie f a t 4 6
, 5 2

. I n a c tu ality , what

Ce la ne se sa id w a s th a t it ha d “ no e vid e nc e PVA fr om Tai wan was be ingdu mpe d in the U. S.

ma rk e t.” Con f. Com m. Vi e ws a t 25 n. 11 3; se e als o Pl.’s Reply Br ief at 5 n.14. Such a stateme nt

is differe nt from a positive assert i o n that it was not being injured. More importantly , one of

Celanese ’s main claims is that subject imports from Taiwa n we re t aking advanta g e of the

a nti du mpi ng or de r o f 20 03 to e xpa nd the ir ma rk e t in the Un ite d St a te s a t th e e xpe ns e of the do me sti c
industry ’s ability to r aise price s. Pl.’s Brief at 20 ( citing

Celanese Post-Conferenc e B rief, C.D. 24,

at 3-9; Petition, C.D. 1, at 38-39). I t would seem then that a car eful a naly sis of the volume of subject

imports compare d to non-subject imports would be esse ntial.

Whether the e x clusion of out-of- scope non- subject imports would have ultimately aff ecte d

the Commiss ion’s analy sis is not clea r, but the Commissi on failed to provide a satisfa ctory

e xpla na tio n f

or its de c isi on

to e xclu de the m. O n r e ma nd the Com mis sio n w ill a ) d e mon str a te

prec isely how the exclusion of cer tain products hy droly

zed in excess of 80 perc ent fro m the

inv e sti g a tio n’ s o ri g ina l sco pe is re la te d to adj us tin g fo r pr od uc ts hy dr oly

zed a t les s tha n 8 0 p e rc e nt,

alre ady out of the orig inal scope by definition, in such a wa y as t o p re cl ude it in the prese nt
investiga tion; and b) provide support for its conclusion t hat t he volum e of out-of-sc ope, non-subjec t
imports included in the Census data is neg ligible a nd would not af

fe ct the outcome of

the

deter mination.Cou rt N o. 04- 0059 4 Pag e 25

Pr ic e e ff e c ts a re the de g re e to wh ic h su

bje c t imp or

ts ha ve be e n a

ble to d e pr e ss o r s up pr e ss 9
pr ic e s in the do me sti c ma rk e t.
Specifica lly , “{i}n eva luating the eff ect of imports of such m er ch andise on pric es, the 10 Commi ssion shall consider whe ther – (I ) there has bee n signific ant price underse lling by the imported merc handise a s compare d with the price of domestic like produc ts of the United States, and (I I ) the e ffe ct of imports of such merc handise otherwise depre sses price s to a signif icant deg ree or pr e ve nts pr ic e inc re a se s, wh ic h o the rw ise wo uld ha ve oc c ur

re d, to a sig nif

ic a nt de g re e .” 19 U. S.C. § 1677(7)( C)(ii). B . Pr ic e Ef fe c ts

I n addition to analy

zing volume, the statute a lso mandates that the Commi ssion c onsider the

“e f f e c t o f im p o r ts

. . . o n p r ic e s in th e U n it e d St a te s f o r d o me s ti c li k e p r o d

u c ts

. ” 19 U.S.C. §

1677(7)( B) (i)(I I ). I n evalua ting the pr ice e ffe cts of subject imports as pa rt of a preliminary

injury 9

deter mination, the Comm ission is require d to consider whe ther t h er e has been sig nificant pric e

underse lling by the subject imports, and whe ther such imports have the ef fec t of depre ssing or

s u p p r e s s i n g d o m e s t i c p r i c e s t o a s i g n i f i c a n t d e g r e e

. 1 9 U

. S

. C

. § 1 6 7 7 ( 7 ) ( C ) ( i i )

. N o t a b l y, 10

“ {u }n de rs e lli ng a lon e is l e g a lly ins uf fi c ie nt t o s up po rt

a n a ff ir ma tiv e inj ur

y de te rm inatio n. ” B ic

Corp. v. United States, 21 CI T 448, 458, 964 F. Supp. 391, 401 (1997)

.

I n the deter

mination under re view her e, the Commission found g ener ally that there was no
pattern of signific ant under selling of subject imp o rt s, and that subject imports had no sig nificant

price depre ssing or suppre ssing e ffe cts. Conf. Comm. Views at 35-44; Preliminary Deter mination

at 23-27. The quarte rly we i gh ted-a vera g e unit price s for domestic a nd imported PVA showed no

pattern of signific ant underselling during the POI , and ther e wa s “attenua ted competition” betwe enCou rt N o. 04- 0059 4 Pag e 26

Whil e the Commission does not clea rly define “attenuated competition,” it appea rs to ref er 11 to a lack of overla

p in major purcha sers of subje ct imports and of domestica lly produce d PVA, and, thus, a lack of head- to-hea d competition be tween subject imports and domestically -produc ed PVA. See Preliminary

Deter mination at 23-27; Conf. Comm. Views at 35-44.

Th e Com mis sio n c on c luded that un de rs e lli ng wa s n ot s ig nif ic a nt d ue to t hr e e ma in 12 finding s: (1) under selling by subject imports f rom Taiwa

n was not at times or for

products that we re sig nif ic a nt; (2 ) t he re wa s n o me a nin g fu l ov e rl a p in the la rg e r cu sto me rs se rv e d by bo th t he do me sti c industry and subjec t imports from Taiwa n, nor wa s there e vidence of sig nificant unde rselling wher e there was ove rl ap ; and (3) the importance of fa ctors other than price . Conf. Comm. Views at 40; Preliminary

Deter mination at 25.

To eva luate the price eff

ects of subject imports, the Commi ssion requested U .S. producer s 13 and importers of

PVA to provide quar

terly net U.S. f.o.b. selling value a nd quantity

data f or sales to unrelate d U.S. customers for five non-spec ialty PVA products (produc ts 1 through 5) sug g ested by petitioner that are produc ed in the United States a nd imported from Ta iwan. Preliminary Deter mination at 23. Both Celane se (who rec ommended the pricing products) a nd DuPont ag ree d that the produc ts were repr esenta tive of both the domestic and subject imported PVA products. Id

. The Commission calculated qua rterly weig hted ave rag e unit price s for the la rg est i m p o rt ers a

nd

c omp a re d th e m to we ig hte d- a ve ra g e un it p ri c e s o f c omm e rc ia l sa le s o f U. S. pr od uc e rs fo r the sa me quarte rs. Preliminary

Deter mination at 23. do me sti c a lly -p ro du c e d a

nd imp or te d PV A. Pr e lim ina

ry De te rm inatio n a t 23 -2 7; C on f. Comm.

Views a t 35-44. 11

Celanese contests the Commi ssion’s ne g ative finding s on underse lling, pric e depr ession and

price suppression. Celane se first ar g ues that the Commission’s finding of no sig n ificant pric e

underse lling contr adicts o t her Commission findings, and is not based on c lear and convinc ing

evidenc e. Sp ec i fi ca l l y , in reg ards to pric ing inf ormation data, Celanese asser ts that the 12 13

Com mis sio n e rr e d in (a ) us ing qu a rt e rl y we ig hte d- a ve ra g e un it pr ic e s fo r pr od uc ts 1 thr ou g h 3 to

e xami ne ins ta nc e s of un de rs e lli ng de sp ite “ inc on sis te nc ie s” in p ri c ingda ta ; a nd (b ) a ff or din g le ss
weig ht to evidence of under selling f or produc ts 4 and 5. Pl.’s Brie f at 25-35.Cou rt N o. 04- 0059 4 Pag e 27

Celanese also cha lleng es the Com mission’s attenuated compe tition findi ng , on which the

Com mis sio n rel ie d a s f

ur the r s up po rt

fo r i ts c on c lus ion

that un de rs e lli ng wa s n ot s ig nif ic a nt.

Acc ording to Celanese, that finding was based on an incomplete inquiry . Celanese further arg ues
that the inquiry

repr esente d an arbitrary switch from tra ditional practice , with results directly at odds

with lost sales and lost revenue evidenc e. Pl.’s Br ief a t 37-38.

1. Under selling

The Commission enjoy s g rea t discre t i o n i n its selection of a me thodology to analy ze and

a sse ss t he e vid e nc e of un de rs e lli ng , as lon g a s the c ho ic e is s up po rt e d b y su bs ta nti a l e vid e nc e . U .S.

Ste e l G ro up v. Uni ted St a te s, 18 CI T 1 19 0, 12 18 , 8 73 F . Su pp . 6 73 , 6 99 (1 99 4) ; see also Hy nix

Semiconductor, I nc. v

. United States, 30 CI T __, __, 431 F. Supp. 2d 1302, 1311 (2006) (“{T}he

U.S. Court of I nterna tional Trade . . . has spec ifically held t hat t he {C ommissi on} possesses broa d

discretion in selec ting methodolog ies to analy z e pric e ef fec ts in particular.” ) (c itations omi tted).

Specifica lly , while the statute re quires the Commi ssion to analy ze unde rselling
, the statute does not

sti pu la te ho w the Com mis sio n is to c a lc ulate the pr ic e of the imp or te d me rc ha

nd ise or the do me sti c
like product. The Commi ssion thus has broad discre tion to choose the m anner in which it calcula tes
the price s, and how it compar es them. Nitrog en S olutions Fa ir Tra de Comm. v. United States, 29

CI T __, __, 358 F. Supp. 2d 1314, 1324 (2005) ( citing Nucor Corp. v. United States, 28 CI T __, __,

31 8 F

. Sup p. 2d 12 07
, 12 57 (2 00 4) ); se e als o Nippon Steel Corp. v. United States, 19 CI T 450, 466

(1995) ( noting the Commission’s broad discre tion to analy ze underselling ).

The statute further require s that the Commiss ion consider the dome stic market a s a whole.

Calabrian Corp., 16 CI T at 350, 794 F. Supp. a t 386 (“Cong ress intended the I TC determine w hetherCou rt N o. 04- 0059 4 Pag e 28

The Commission ex plains weig hted-a vera g e price as “a measure of a single mar ket price 14 that tak e s ac c ou nt of dif

fe ri ng sa le s volu me s of two or mor e fi rm s r e po rt ingpr ic e da ta fo r t he sa me product a nd period. The weig hted-a vera g e pric e is construed for a particula r product and ti me per iod (c a le nd a r q

ua rt e r) fr om p ri c e a nd

qu a nti ty da ta re po rt e d b y

tw o o r m or e fi rm s in

re sp on se to questionnaire r equests. Arithmetically , it is calculated by summing the re ported sale s value (pr ice X q ua nti ty ) o f e a c h r e sp on din g fi rm

fo r a pa rt ic ula r p ro du c t a nd

qu a rt e r, a nd

div idi ng thi s a g g re g a te sales value by

the sum of the repor

ted quantity of eac h responding firm for this produc t a nd quarte r. Conceptually , the ca lculation aver ag es price s of seve ral re porting firms weig hed by th e quantiti es repor ted by eac h firm, s uch that the price associate d with a hig her- quantity sale will have a g rea ter weig ht (influence ) in the re sulting we ighte d-ave rag e pric e than the price of a lower -quantity sale.” Def .’s B rief at 38. or no t th e do me sti c ind

us tr y (a s a wh ole ) h a s e xpe ri e nc e d mat e ri a l inju ry du e to the imp or ts. Th is

lang uag e def

ies the sug g estion that the I TC must make a disag g reg ated a naly sis of material injury .”).

The Commission asserts that using we ighte d-ave rag e pric ing an al y sis allowed it to consider the

ma rk e t a s a

wh ole

. De f. ’s B ri e f a t 39. Mo re ov e r, the Com mis sio n c on te nd s th a t it a c tua lly 14

considere d disag g reg ated price data for pr oducts 1 throug h 3. Def .’s B rief a t 39. The investig ation

included mea suring “all statutory fac tors based on a

ny permutation in arg ument ra i s ed by the

parties.” Def

.’s B rief a t 40 ( citing

Staff Report a t Tables E-1 to E- 3).

As e v e n C e l a n e s e c o n c e d e s , t h e s u b s t a n t i a l d e f

e r e n c e a c c o r d e d

t h e C o m m i s s i o n i n its

selec tion of methodologie s to analy ze price e ffect s i s even g rea ter whe n, in reg ards to we ighte daver ag e pric e ana ly sis, the m ethodolog y selec ted by the C ommissi on repr esents its normal pra ctice.

See Hy nix Semiconductor, 30 CI T at __, 431 F . Supp. 2d at 1311; Def.’s B rief a t 37-40; Pl.’s Brief

at 29 (Commission’s reliance on “quar terly weig hted-a vera g e unit price s . . . was consistent with the

Commi ssion’s normal prac tice”)

.

Fur ther, the Commi ssion’s use of weig hted-a vera g e price has been previously sustained by

the cour t

. De f. ’s Br ief a t 39 ( citing Ni pp on Ste e l Co rp ., 19 CI T a t 46 6) . Ce la ne se ne ve rt he le ssCou rt N o. 04- 0059 4 Pag e 29

Ba sed on a price compar ison f or five non-spe cialty

PVA products (pr oducts 1 throug h 5), 15
t h e C o mmissi on found that, for products 1 throug h 3, there wer e ac tually more instance s of

overse lling than underse lling. Conf. Comm. Views at 36-37 ( citing Sta ff Re po rt a t T a ble s V -1 to V- 6) ; Pr e lim ina

ry De te rm inatio n a t 24 . I n a dd iti on , f or pr od uc t 1, the Com mis sio n n ote d th a t e a rl y underse lling g ave w ay

to overselling at the s am e ti me that the volume of subjec t imports was in c r e a s i n g

. P r o d

u c t s 2 a n d

3 b o t h h a d

m o r e i n c i d e n c e s o f

o v e r s e l l i n g t h a n u n d e r s e l l i n g a s w e ll. Howeve r, while most of the underse lling was during the ear lier portion of the period of inve stiga tion, p r o d u c t 2 w a s [ ]. C onf. Comm. Views at 36-37; Preliminary Deter mination at 24. c on te nd s th a t – n or

ma l pr a c tic e or no t – t

he Com mis sio n e rr e d in

its us e of we ig hte d- a ve ra g e un it

price s in the case at bar , beca use of a nomalies in the data. Pl.’s B rief at 25-34; Pl.’s Reply Br ief a t

11-14.

Compar in g d o me s ti c a n d s u b je c t i mp o r t p r ic in g d a ta , u s in g a w e ig h te d

- a v e r a g e p rice

a na ly sis , th e Com mis s i o n

f o u n d a “ mixe d p a tte rn

of un de rs e lli ng a nd

ov e rs e lli ng by

su bje c t im po rt s”

during the POI , with an “eve n number of instances of under- and over selling.” Conf. Comm. Views

at 36; Prelimin ar y De t ermination at 23-24. The Commissi on found that under selling w as not
signific ant, noting, a

mong othe r finding s, that the pattern w as one of underse lling in the ear lier par t
of the pe riod, g iving wa

y to overselling in the more re cent por tion. Conf. Comm. V iews at 36; 15

Preliminary

Deter mination at 23-24.

a. Weig hted-Ave rag e Price s

i. Products 1-3

Celanese claims that, in calc ulating qua rterly weig hted-a vera g e unit price s of imported PVA

for pr oducts 1 throug h 3, the Commiss ion relied on importer data tha t wa s inconsistent with the

Commi ssion’s own finding that PVA is a fung ible product, as well as the importer’ s admission thatCou rt N o. 04- 0059 4 Pag e 30

price s g ener ally

do not vary

signific antly . Pl.’s Brief at 32. Celanese claims such inconsistencie s

should have led the Commi ssion to use disag g reg ated da ta or, “ at a minimum,” to conduct fur ther

inquiry . Pl.’s Brief

at 33.

As an initial matter
, it is worth noting – in the context of Celanese ’s challeng e t o the

reliability of informa tion provided by another party – that the cr edibility

of sourc es is larg ely

a matter
within the province of

the C ommissi on, as t he trier of fact. Al Tec h Specialty Steel Corp. v. United

States
, 27 CI T 1 79 1, 18 02 (2 00 3) ; see also Cl e o I n c

. v

. U n it e d St a te s , 3 0 CI T

_

_ , _

_ , 2 0 0 6 WL

2685080 at * 12 (2006) ( citing Nippon Steel Corp. v. United States, 458 F.3d 1345, 1357 ( Fe d. Cir.

2006)).

I t i s t ru e the Commission i s to use “the be st information available ” whe n apply ing the

rea sonable indica tion standard. Am. L amb Co., 785 F.2d at 1002. That mea ns that the Commis sion

is t o “ inv e sti g a te the a lle g a tio ns in a s th or ou g h a ma nn e r a s po ssi ble us ing the inf or ma tio n a va ila

ble

wi thi n th a t ti me pe ri od , a nd

. . . pr ov ide int e re ste d pa rt ie s a re a so na

ble op po rt

un ity to p re se nt t

he ir

views.” Id. ( citing H.R. Rep. No. 317, 96 Cong., 1 Sess. 61 (1979)). th st

Her e, the Commission di d take steps to conf irm the data tha t Cela n es e q u es t i o ns. What

Celanese discounts as a “ routine che ck,” the Commi ssion describes a s a “c are ful revie w” c onducted

“per its normal proce dure,” wher e it specific ally questioned the importer about the points raised by

Celanese
, in

a d d it io n to in q u ir ie s o n s e v e r a l p o in ts w h e r e th e Co mm is s io n h a d it s o w n p ricing

conce rns. Staff Repor

t at V-16 n.53.

The Commission i s char g ed with deter minin g wh et h er there is a r easona ble indication of

materia l injury
, “not a rea sonable indica tion of the nee d for f urther inquiry .” Am. L amb Co., 785Cou rt N o. 04- 0059 4 Pag e 31

F.2d a t 1001. The purpose of t he preliminary injury deter mination is t o “eliminate unne cessa ry and

c os tly inv e sti g a tio ns wh ic h a

re a n a dmi nis tr a tiv e bu rd e n a nd a n im pe dim e nt t o tr a de .” Am . L a mb

Co., 785 F.2d at 1002-03 ( citing S. Rep. No. 1298, reprinted in 1974 U.S.C.C.A.N. 7186, 7308).

T h e r e i s n o r e a s o n t o a s s u m e t h a t t h e C o m m i s s i o n ’ s n o r m a l p r o c e d

u r e s a r e c u r s o r

y.

De te rm ini ng wh e the r c e rt a in d a ta a re “ inc on sis te nt” is a

fa c tua l a na ly sis we ll- su ite d f or the e xpe rt ise

of the Commission. I n the circ umstances of this case, Cela

nese’ s reque st that the Court remand on

the g rounds that data a

re inc onsistent is, i n eff

ect, a reque st t h at the Court rew eig h the evidenc e,

which is dec idedly

bey ond the Court' s domain. Timken Co. v. United States, 12 CI T 955, 962, 699

F. Supp. 300, 306 (1988).

F ur the r, the fi nd ingthat PV A i s a fu ng ibl e c om mo di ty is n ot i nh e re ntl y inc on sis te nt w ith

price differ entiations. See Preliminary Deter mination at 29; Def

.-I nts.’ Br ief at 35. The a

naly sis of

int erch a ng e a

bil ity fo r l ike pr od

uc t su bs tit uta bil ity ma y be dif fe re nt f ro m th a t us e d in

pr ic e e ff e c ts
analy sis. See Ranche rs-Cattlemen Ac tion L eg al Found., 23 CI T at 881, 74 F

. Supp. 2d at 1371

(u ph old ing , b a se d o n th e imp or ta nc e of c on te xt, Co mmi ssi on

de c isi on to t reat int e rc ha

ng e a bil ity

differ ently

in its cumulation analy sis than in its like product a naly sis).

ii . P rod uct s 4 & 5

Celanese contends that the Commiss ion failed to ar ticulate a r ational basis for its dec ision

to a ffo rd le ss w e ig ht t o e vid e nc e of un de rs e lli ng fo r p ro du c ts 4 a nd 5, a nd tha t it s d e c isi on

is

there fore arbitra

ry and capricious, an a

buse of discr etion and not in acc ordanc e with the law. T he

Co mm is s io n f

o u n d th a t, [

], product 4 was in the pape r sec tor (which involved le ss marketing overla p), andCou rt N o. 04- 0059 4 Pag e 32

the [ ] of product 4 sold was less sig nificant than the products whe re the re w as more

overse lling. De f.’s B rief at 42-43. Celanese further asser ts tha t the Commi ssion wrong fully relied

on the “f act” that DuPont had not com p l ai n ed o f any adver se price eff

ects to dete rmine that

underse lling wa s not significa nt with respec t to product 5. Pl.’s Brie f at 34-37; Pl.’s Reply Br ief a t

14.

C e l a n e s e ’ s c h a l l e n g e s t o t h e C o m m i s s i o n ’ s p r i c i n g a n a l ys i s a r e w i t h o u t m e r i t

. G e n e r a l l y,

th e Co mm is s io n h a s th e d is c r e ti o n to w e ig h e v id e n c e , r e s o lv e c o n tr a d ic to r y e v id e n c e , a n d

a n a ly ze

p r i o r f i n d i n g s i n l i g h t o f n e w c i r c u m s t a n c e s

. C o m m

. f o r F a i r B e a m Im

p o r t s v

. U n i t e d

S t a t e s , 2 7 C IT

932, 955 (2003). F urther, the Commi ssion is presumed to have considere d all evidenc e in t he re cord

in making its dete rmination, absent some showing to t h e c o n tr a r y

. Ra n cher s-Cattlemen Ac tion L eg al

Found., 23 CI T at 891, 74 F. Supp. 2d at 1379 ( citing Conn. Steel Corp., 18 CI T at 316, 852 F . Supp.

at 1065) (c itations omi tted).

I n th is c a se , in

re a c hin g its c on c lus ion s a s to pr od uc t 5, the Com mis sio n d id n ot r e ly so le ly

on DuPont’s statements, but also specific ally considere d the “undisputed fa ct that price s for produc t

5 wer e rising i n the m ost rec ent period.” Def .’s Brief at 44 ( citing Conf. Comm. Views at 38-40).

F i n a l l y, C o n g r e s s i n t e n d e d t h a t t h e C o m m i s s i o n d e t e r m i n e w h e t h e r

o r n o t t h e d o m e s t i c i n d

u s t r y as

a wh ole ha s e xpe ri e nc e d mate ri a l in jur y du e to t he imp or ts. Nucor Corp. v. United S tates, 414 F.3d

1331, 1336 (F ed. Cir. 2005)

. The Commi ssion is not r equire d to f ocus on one portion of the industry

by making a disag g reg ated a naly sis of m ater ial injury

. Calabrian Corp., 16 CI T at 350, 794 F . Supp.

at 385.Cou rt N o. 04- 0059 4 Pag e 33

iii. C onclusion

I t is worth not ing that industry views may

be conside red a s an ec onomic fac tor. Alleg heny

L udlum Corp. v. United States, 287 F.3d 1365, 1375 (F ed. Cir. 2002) (“ {T}he industry best knows

its own economic intere sts and, there fore
, its views can be considere d an ec onomic fac tor.”) ( quoting

Surameric a de A leac iones L aminadas, C.A. v. United States, 44 F .3d 978, 984 (F ed. Cir. 1994)).

The statute “ authorizes broad evalua tion of any rele vant fa ctors.” A lleg heny L udlum, 287 F.3d at

1375 ( quoting

19 U.S .C. § 1 67 7( 7) (B )( ii) , th e Com mis sio n “ ma y c on sid e r s uc h o the r e c on omi c

fac tors as ar e re levant to the dete rmination reg arding whether there is materia l injury by rea son of

imports”). The Commission therefor e wa s well wit h i n i t s d i s cretion to consider the view s of

Du Pon t.

Moreove r, “a

finding of mater ial injury require s a causa l, not mere ly temporal, c onnection”

b e tw e e n u n d e r s e ll in g a n d mate r ia l i n

ju r y

. Co mm

. f

o r F a ir Co k e T r a d e, 28 CI T at

_

_ , 2 0 0 4 WL

1615600 at * 20 ( citing

Ge ra ld M e ta ls, 13 2 F .3 d a t 72 0) . T he Com mis sio n a c kn ow le dg e d th a t, “ in

isolation,” the underse lling could be view ed as sig nificant. Conf. Comm. Views at 36; Preliminary

Deter mination at 24. Howeve r, t h e C ommissi on found under selling not sig nificant ba sed on the

rec ord as a

whole, including consideration of non-price fac tors and the lack of underse lling in are as

of si g n if ic a n t c o mp e ti ti o n o v e r la

p

. Co n f

. Co mm

. V ie w s a t 4 0

. F in a ll y , th e s ig n if ic a n c e o f price

ef fe ct s i s not based solely

on evidenc e of unde rselling . Comm. for Fa ir Be am I mports, 27 CI T at

952.

I n the instant case , the Commi ssion’s choice of a we ighte d-ave rag e pric ing me thodology was

rea sonable a

nd deser ves def ere nce be cause , int e r a lia , the Commiss ion routine l y uses weig hted-Cou rt N o. 04- 0059 4 Pag e 34

T h e Co mm is s io n f

o u n d th a t e v id e n c e s h o w e d th a t, o f Ce la n e s e ’ s to p te n c u s to me r s , [ 16 ] bought imported PVA from Ta iwan, indicating “attenuated competiti on” and suppor ting the Commi ssion’s finding of

a lac k of any signific ant underselling. Pre liminary Deter mination at V-5; Staff Report a t V-6. aver ag e pric ing; the Commission’s use of we ighte d-ave rag e pric ing ha s been previously sustained

on judicial revie w; and the Commi ssion c onsidered and reje cted the use of disag g reg ated data. On

the re cord be fore the C ourt, it cannot be said that the Commissi on has fa iled to articulate a ra tional

ba sis fo r i ts p ri c inga na ly sis

.
b

. At t en u at ed C o m p et i t i o n Fi n d i n g

Celanese next asserts that the Commi ssi o n ’s fi n ding of attenuate d competition betwee n
domestic and imported PVA wa s based on a depar ture fr om normal prac tice, is c ontradicte d by other

Com mis sio n f

ind ing s, a nd

is n ot c or

ro bo rate d b y

e vid e nc e on

the re c or d. Specifi c a lly , Ce la ne se

c la ims that the finding wa s based on a n incomplete inquiry

into customer over lap, and is contra dicted

by the lost sales and lost reve nue evide nce. Pl.’s B rief at 37-38.

i. Normal Prac tice

Cela n e s e f

ir s t o b je c ts th a t t

h e Co mm is s io n “ in e xp li c a b ly d e p a r te d ” f

r o m i ts tr a d it io n al

prac tice of e x amining evidence of l ost sales and reve nues t o deter mine the extent of competition, and

focuse d instead on the e x tent to which imported PVA fr o m T aiwan w as sold to the same major

customers to which the domestic industry sells. Ba sed on a c omparison of the top ten c ustomers

repor ted by domestic produce rs and subjec t importers, t h e Co mm is s io n

f o u n d a tt e n u a te d c o mp e tition

betwee n the dom estic m arke t and subj ect imports. The Commission t hen re lied on that finding as 16

su pp or t f or its de te rm inatio n th a t un de rs e lli ng by su bje c t im po rt s w a s n ot s ig nif

ic a nt. Ce la ne seCou rt N o. 04- 0059 4 Pag e 35

argue s t h at, besides reflec ting a n abrupt de parture from routine, the Commi ssion’s finding is (a )

direc tly at odds with the lost s al es an d l o s t reve nue evide nce, a nd (b) ba sed on insufficie nt

repr esenta tion. Pl .’s B rief a t 37-38.

There is a g ener al rule tha t an “a g ency must either conf

orm itsel f t o i t s p ri o r dec isions or

explain the reasons for

its de parture .” Citrosuco Paulista, S.A. v. United States, 12 CI T 1196, 1209,

704 F. Supp. 1075, 1088 (1988) ( citing Sec’y o f Agr i c. v

. United States, 347 U.S. 645 (1954))

(additional citations omitted). An ac tion by the Commiss ion “be co m es ‘age ncy prac tice’ w hen a

uniform and e stablished proce dure e x ists that would lead a party , in the absenc e of notification of

c ha ng e , r e a so na

bly to e xpe c t a dh e re nc e to t he e stab li shed

pr a c tic e or

pr oc e du re .” Ra nc he rs

Cattlemen Action L eg al Found., 23 CI T at 885, 74 F . Supp. 2d at 1374.

Ce la ne se of

fe rs no dir e c t su

pp or t fo r t he pr op os iti on

that th e Com mis sio n’ s ana ly sis in t his

case repr esente d an ab ru p t d epar ture fr om routine. Howe ver, the Commi ssion likewise offe rs no
support for its contention that it “routinely solicits information respec ting the ma jor customers of

suppliers of produc ts under investig ation.” De f.’s B rief at 45.

The Commission poi nts to langua g e in the Preliminary Deter mination indicating that

“{c}ompe tition among PVA suppliers a nd its im pact on their selling price s can a lso be aff ecte d by

the extent to which they s el l t o t h e s am e customers.” Id. But it is not clear how that constitutes

evidenc e of r outine. The Co m m ission fails to point to any lang uag e ana ly

zing customer ove rlap

information fo r t h e 10 lar g est customers of domestic produce rs and importer s in the 2003

inv e sti g a tio ns , b ut a dmi ts tha t in 20 03 it d id c on sid e r l os t sa le s and los t r e ve nu e e vid e nc e in

conjunction with evidenc e of w idesprea d underse lling and other fac tors. Her e, the CommissionCou rt N o. 04- 0059 4 Pag e 36

discounts lost sales and reve nue alleg ations as non-dispositive anec dotal evidenc e. Id . at 45 n.73,

47-48. B ut it was prec isely such evide nce of

lost sales and re venue that the Commiss ion relied on

in 2 0 0 3 a s “ e v id e n c e o f d ir e c t h e a d

- to

- h e a d p r ic e c o mp e ti ti o n

. ” Pl

. ’ s B r ie f a t 4 2-43 ( citing

Preliminary

Deter mination at 40).

Whil e the scope of judicial re view of a preliminary

injury deter mination by

the Commiss ion

is narr ow, t he age ncy

must nonetheless explain the reasons be hind its determination. See Bow man
Transp., 419 U .S. at 285-86; M ot. Vehicle Mf rs. Ass’n, 463 U.S. at 43 (c itations omi tted). I n the

case at bar , it is i mpossible to determine fr om the briefing and the e x isting re cord w hether the

Commi ssion in fact has a norma l prac tice, much less whe ther it depa rted fr om that prac tice in the

proce eding at issue (and, if so, whether the depar ture was war

rante d). Remand is war

rante d to affor d

the Com mis sio n a

n o pp or tun ity to a mpl if y its ra tio na le to f

ur the r a dd re ss C e la ne se ’s c la im.

ii. L ost Sales

Celanese arg ues that it did in fact lose sale s due t o price eff ects of subje ct imports. See Pl.’s

B ri e f a t 41 -4 3. Th e Com mis sio n, ho we ve r, dis c ou nts the se ins ta nc e s a s a ttr ibu ta ble to o the r f

a c tor s.

See Def .’s Br ief a t 46-50. Acc ording to the Commi ssion, in one instance, the pur chase r indicate d

that th e re we re re a so ns oth e r t ha n p ri c e fo r i ts d e c isi on

to b uy fr om a dif fe re nt s up pli e r; a nd

a los t

sale to a se cond purchaser occur red in [ ] , when ( acc ording to the Commi ssion) the

volume of subject imports from Ta iwan wa s declining . Def .’s B rief at 46.

The Commission i s aff

irmatively

obliga ted to underta ke a “ thoroug h” investig ation based on

the i nformation available to it prior to making its preliminary deter mination. Am. L amb Co., 785

F .2 d a t 10 03 . T he re qu ir e me nt t o u se the be st i nf or ma tio n a va ila

ble ob lig e s th e Com mis sio n toCou rt N o. 04- 0059 4 Pag e 37

rea sonably

seek a ll information that is acc essible or obtainable f rom whate ver sour ce. Id. Howeve r,

there is no statutory

provision r equiring the Commiss ion to analy ze lost sales in a particular manner

. The Commission “may

make suc h an eva luation on whateve r ra tio n al basis it chooses.” Ma ine

Potato Council v. Unit ed States, 9 CI T 293, 302, 613 F. Supp. 1237, 1245 (1985)

.

No ne the le ss, a re vie w of the re c or d sh ow s that the fi rs t pu rc ha se r s pe c if

ic a lly re pli e d “ y e s”

on the questi onnaire when asked whe ther pric e wa s the rea son for switching . Pl.’s Brief at 39 ( citing

Staff Report a t V -38). I t is difficult to r econc ile that fac t w ith the Commi ssion’s a ssertion that price

wa s n ot t he re le va nt f a c tor in t ha t lo st sa le . A s f

or the se c on d lo st s a le , Ce la ne se a sse rt s th a t,

a lt h o u g h s u b je c t i mp o r t v o lu me mi g h t h a v e d e c li n e d f o r [ ], it

d id n o t d e c r e a s e d

u r in g [

] wh e n th e sa le a t iss ue wa s los t. Pl. ’s B ri e f a t 40

. Th e Com mis sio n do e s no t a dd re ss t his

char g e in its brief; the c ited section of the Commission’s Views does not break d o wn t h e data by

qu a rt e rs . D e f. ’s B ri e f at 46 ; see Staff Report a t I V-1.

iii. C ustomer Over lap

Celanese asser

ts that the Commi ssion’s finding of attenuate d compe t i t i o n – based on la ck

of extensive overla

p among the t op ten custom ers – was non-repre sentative, and is simi larly at odds

with the rec o rd as a whole. A ccor ding to Cela nese, the Commi ssion’s methodology masked the

signific ant competition in the rema ining c ommercia l t ra n sactions which c onstitut ed a substantial

portion of Celane se’s c ustomer base . Pl.’s Reply Br ief a t 16. Celanese points out that the surve y
data show sig nificant c ompetition between domestic a nd imported P VA b ey o n d the top ten

customers foc used on by

the Commiss ion. Pl.’s Brief at 40. Four

of the 17 purc haser s survey edCou rt N o. 04- 0059 4 Pag e 38

stated they

had shifted f

or price rea sons, and 10 re ported that their U.S. source had re duced its price

to compete with lower

price d subject imports. Pl.’s Brief at 40.

iv. Conclusion

Remand is appropr iate whe re a n ag ency has not articula ted a r ational conne ction betwee n the

fac ts found and the c ho ices made

. See Bur lington Truc k L ines, 371 U.S. at 168. Her e, the

Commi ssion has n o t adequately articula ted its reasons f

or finding that competition betwee n the

sub j ect imports from Taiwan a nd domestic PVA is attenuated; indee d, as noted a bove, it is not

en ti r e ly c le a r f r o m t h e Pr e li mi n a r

y D e te r mi n a ti o n h o w th e Co mm is s io n is d e f in in g “ a tt e n u ated

competition.”

On re mand, the C ommissi on shall further explain how i t defines a ttenuated c ompetition, as

well as the r eleva

nt analy tical methodolog y

. The Commi ssion shall state with specificity the fa ctors

un de rl y ingits fi nd ing of a tte nu a te d c omp e tit ion in thi s pr oc e e din g , a nd e xpla in s pe c if

ic a lly wh y it

is rea sonable to discount the sig nificant c ompetition outs ide the top 10 customers, pa rticularly since

14 of the 17 pu rc ha se rs su rv e y e d c ite d p ri c e c omp e tit ion a s im po rt a nt.

c. Non- price Fa ctors

Celanese also arg ues that the Commission provided no “non-pric e re lat ed ex p l anation” as

to why purcha sers would c hoose subject imports over domestic PVA. Pl.’s Br ief at 27. I n addition,

Celanese asser

ts that the Commi ssion’s finding on the “importanc e of pr ice in the c ontext of

analy zing . .

. substitut ability ” contradicts i ts analy sis of t he im portanc e of non-price fac tors. Pl.’s

Br ief a t 44.Cou rt N o. 04- 0059 4 Pag e 39

I n fac t, the Commi ssion s t at ed : “T he deg ree of substituti on in demand betwe en PVA 17 produce d in the United States and that imported from Taiwan depends upon such fa ctors as r elative price s, ty pes of c ustomers, conditions of sales, purc haser supply require ments, and product d i f f e r e n t i a t i o n

. P r o d

u c t d i f f e r e n t i a t i o n d e p e n d s o n f

a c t o r s s u c h a s t h e r a n g e o f p r o d u c t s , q u a l i t y, availability , reliability

of supply , and the mar

ket perc eption of these la tter three fac tors. Ba sed on the repor ted information in t h i s i n v estig ation, we f ind there is substitutabilit y in demand betwe en the PVA produce d domestically and that imported fr om Taiwan, but some reported pr oduct differ entiation and other

differ ence s may

limit the deg ree of this de mand substitut ion.” Preliminary Deter mination at 20. Ho we ve r, the Com mis sio n d id p oin t to sp e c if ic fa c tor s –

su c h a s d ive rs ity

of su pp lie rs ,

qu a lit y , a nd pr e qu a lif

ic a tio n – a s n on -p ri c e c on sid e ratio ns that pu rc ha se rs too k in to a c c ou nt.
Preliminary

Deter mination at 25. The Commissi on also pointed to e vidence that “the PVA industry

has bec ome incre asing ly

g lobal in nature a

nd that PVA price s have converg ed ac ross diffe rent

reg ions and applica tions as larg e multinational fi rm s have g rea ter a cce ss to price infor mation and

are able to sec ure g lobal contra cts for the ir PVA nee ds.” Id . at 26 ( citing CCP C Post -Confer ence

Br ief, C.D. 21, at 6). Moreove r, the Commiss ion never said substitut ability

was c omplete. I t was 17

well within the discretion of the Commi ssion to assign diffe rent we ights to d i ff er ent piece s of

evidenc e. Comm. for F air B eam I mports, 27 CI T at 955.

Celanese n o t es evidenc e provide d by DuPont and evidenc e fr om the 2003 investiga tions

(which the Commi ssion claims corrobor ates its finding on the impor t ance of fa ctors other than

price ), and a

rg ues t hat t he evidence in fact shows pric e to be the most important fa ctor. Pl.’s Br ief

at 45.

DuPont submitted a number of inter nally prepa red “ transac tion reports” doc umenting [

]. D uPo nt P os t- Con fe re nc e B ri e f, C.D . 1 9. I n th e va st m a jor ity of tho se

tr a ns a c tio ns , D uPo nt a

ttr ibu te d th e los t s ale to pri ce. Ce la ne se c la ims that th e tr a ns a c tio n r e po rt sCou rt N o. 04- 0059 4 Pag e 40

con tr adi c t th e te sti mon y

of Du Pon t’ s w itn e ss c on c e rn ingthe tr e nd tow a rd div e rs if y ingsu pp ly

source s as ac cele rating and not price -driven. Pl.’s B rief a t 46 ( citing

Confere nce T ransc ript, P.D.

39, at 71). Celane se also cla ims thi s testimony is undermined by the same w itness’s statement under

oath in the 2003 investig ations that “{b}y far the single most important fac tor is price a nd then price

and then pr ice a g ain. Once we meet the subject import price , these other non-price fac tors may

become a tie-br eaker i n a buy ing de cision but if we don’t mee t the price s, we lose the busine ss.”

Pl.’s Brief

at 47 ( citing

Poly viny l Alcohol from China and Korea
, I nv. No. 731-TA-1014 and 1017

(F inal), US I T C P u

b

. 3 6 3 4 ( “ PV A f

r o m C h in a

a n d K o r e a ” ) a t 3 2 ( Se p t. 2 0 0 3 ) )

. Ce la n e s e f u r ther

emphasizes that, while the Commissi on in its 2003 i nvestig ation n o t ed t h e n on-price fac tors on

which it now re lies, the Commis sion found price to be much more important then. Id

.

As a g ener al matter, howeve r, the Commi ssion ha s the discre tion to weigh e vidence , resolve

contra dictory

evidenc e and a

naly ze prior finding s in lig ht of new circ umstances. Conn. St eel Corp.,

18 CI T at 315 , 852 F . Su

pp . a t 10 64 ; see also Am

. L a mb Co.
, 78 5 F .2 d a t 10 02 -0 4. “ I t is no t w ith in

the Court' s domain either to weig h the ade quate qua lity or quantity

of the e vidence for suff

iciency

or to reje ct a finding on g rounds of a differing interpre tation of t he record.” Timken Co., 12 CI T at

962, 699 F. Supp. at 306. Celanese ’s challeng es to the Commissi on’s finding s on non-price fac tors

must therefor e be r ejec ted.

2. Price De pression

I n the proc eeding at issue, the Commissi on found n o price depre ssion. The Commis sion

e xpla ine d th a t, w hil e the re were de c lin e s in PVA pr ic e s in

the U. S. m a rk e t ov e r t

he POI , th os e

declines la

rg ely occur red in the ear lier portion of the period (betwe en 2001 and 2002) when subjec tCou rt N o. 04- 0059 4 Pag e 41

The Commission also not ed that domestic produc ers ha d been a ble to increa se price s in the 18

rec ent period. Def

.’s Brief a t 51 ( citing Conf. Comm. View s at 41-42). Ce lanese claims this finding is contradicte d by

evidenc e showing that price s have not rise n, and tha t the Commiss ion does not dispute the fac t tha t Ce lanese
, unlike DuPont, had been una ble to raise pr ices. Pl.’s Reply Br ief a t 1 9

. T h e e v id e n c e in

th e r e c o r d

is mi xe d

. I t a

p p e a r s th a t C e la

n e s e w a s a

b le to r a is e p r ic e s [ ], but not enoug h to cover

incre ased c osts. Prelimi nary Deter mination at 26-27; Conf. Comm. Views

a t 43 ; see also Pl.’s Br ief at 51-52, 56. Ba sed on the evidence available in the re cord, the importance of such mixe d ability

to increa se price s to the Commi ssion’s finding tha t there w as no price depre ssion is unclear. On r emand, the Comm ission shall explain in g rea ter detail how the evidenc e supports its finding. Staff Repor t at V-17 to V-26.

F o r e xa mp le
, [ 19 imports from Taiwa

n wer e dec lining. Preliminary Deter mination at 26. The Commissi on further

noted that “{g }ener ally price s beg an to inc rea se or stabiliz ed during the latter pa rt of the pe riod of

investiga tion, notwiths tanding an incr ease in th e v o lu me o f s u b je ct imports betwee n 2002 and 2003.”

Id

. 18

Cela n e s e c o n te n d s th a t, in ma k in g it s f in d in g , th e Co mm is s io n r e li e d o n th e s a me f

lawed

questionnaire dat a co ncer ning subje ct imports discussed in section A.1 above , and asse rts that

Census data show a

much less pr o n o u n ced de cline. Pl.’s Br ief a t 49. Celanese ha s a compe lling

a rg ume nt r e g a rd ing

the pr ic e tr e nd s found by the Com mis sio n. Whil e the Com mis sio n a pp a re ntl y
viewed pr ices a s g ener ally stabiliz ing or

incre asing toward the end of the investiga tion, the evidence

se e ms t o i nd ic a te that th e y we re fl a t or

e ve n d e c re a sin g

. On

re ma nd , th e Com mis sio n s ha ll 19Cou rt N o. 04- 0059 4 Pag e 42

]. S taff Re port at V-17 to V- 26.
A cost-pr ice sque eze occ urs when the cost of g oods sold (“COGS”) e x cee ds price a nd the 20 produce r is unable to ra ise the price – that is, w hen the produce r is una ble to se ll the g ood for more than it costs to produce it. Nippon Steel Corp., 458 F .3d at 1354.

Celanese takes strong exception to the Comm ission’s entire ana ly sis of its cost structure, 21 and asse rts that many of C ommissi on’s findi ng s reg arding its differe nces a re not supporte d by

the

rec ord – [ ]. But, as dis cus sed abo ve , th e Com mis sio n h a s b ro a d d isc re tio n in c ho os ingme tho do log ie s, a nd Ce la ne se
mere ly protests the outcome. Cela nese does n o t co ntend that the methodolog y used by the Commi ssion was arbitra

ry or a sur prise. Pl.’s Br ief a t 55. Evidence on the re cord shows the Commi ssion fully

considere d the re levant issues of f act. De f.’s B rief at 55-57. elabor ate on its view o f t h e rele vant evidenc e, and e x plain any appar ent contra dictions and

inc on sis te nc ie s.
3. Price Suppression

Ce la ne se a lso ob

je c ts t o th e Com mis sio n ’ s f i n d i n g o f n o s ig nif

ic a nt p ri c e su

pp re ssi on . Wh ile

the Commiss ion did find evidenc e of a cost-price sque eze, it did not find reasona ble evidenc e that

it was a re sult of cost suppression by subject imports from Taiwa n. Preliminary

Deter mination at 20

2 7 ; C o n f

. Co mm

. V ie w s a t 4 4

. Ra th e r , in a d d it io n to it s a n a ly s is o f [

], the Commi ssion a lso f ocused on evidenc e that overse lling incre ased towa rd the e nd of 21

the per iod of investigation
, wh en subject import volume was rising , and that fa ctors other than

su bje c t im po rt s h a d ana dv e rs e imp a c t on pr ic e s. Pr e lim ina

ry De te rm inatio n a t 27 ; Co nf . Co mm.

Views a t 44.

Celanese disputes the Commi ssion’s treatment of c ost informat i o n , asserting that the

Commi ssion failed to articula te a r ational conne ction betwee n its findings on cost informa tion andCou rt N o. 04- 0059 4 Pag e 43

Specifica lly , the Commiss ion noted: “Cost of g oods sold as a ra t i o t o sales dec lined 22 be tw e e n 2 00 1 a

nd 20 02 a s n a tur a l g a s p ri c e s f e ll d ur inga tim e of de c lin ing PVA pr ic e s, bu t the ratio of cost of g oods sold to sales increa sed betwe en 2002 and 2003 and continued to increase betwee n interim 2003 and interim 2004, as incr ease s in pr ices in the U.S. market we re una ble fully to keep pace with increa sing c osts.” Preliminary Deter mination at 27.

Celanese arg ues that [ ] – b o t h n o t ed as 23

c omp on e nts of Ce la ne se ’s c os t stru c tur e dif fe re nc e s – a re sy

mpt oms e vid e nc inginj ur

y , n ot a c a us e of inj ur y . Ce la ne se fu

rt he r a sse rt s th a t th e fa c t th a t it ha d [ ] co mpa re d to other produc ers doe s not discount the fac t that those reve nues showed [ ] t han the importance to pro d u ct i o n o f natural g as (the pr ice of which wa s rising) . Pl.’s Brief at 54.

Celanese fur t h er as s erts that, although the Commission purports to have consider ed the c ost of

natura l g as in its cost-pric e squeeze analy sis, it actua lly did not do so. Pl.’s Reply Br ief a t 21. But

the re cord doe s not bear out that charg e. The Commi ssion specifica lly took note of the impac t of

na tur a l g a s p ri c e s in

its pr ic e su

pp re ssi on a na ly sis

. Pr e lim ina

ry De te rm inatio n a t 27 ; Co nf . Co mm. 22

Views a t 43. And, in any event, the Commi ssion is presumed to have conside red a ll of the evidenc e

o n t h e r e c o r d
, a

b s e n t a s h o w i n g t o t h e c o n t r a r

y

. R a n c h e r s

- C a t t l e m e n A c t i o n Le g a l F o u n d

. , 2 3 C IT

a t 88 7, 74 F . Su

pp . 2 d a t 13 76 ; Co nn . St e e l Co rp ., 18 CI T a t 31 6, 85 2 F . Su pp . a t 10 65 . Cel a ne se

h as fa i l ed t o m ak e s u ch a s h o wi n g.

Ce la n e s e a r g u e s th a t th e Co mm is s io n ’ s f in d in g s a s to Ce la

n e s e ’ s [ ],

“ a re sim ply a fu nc tio n o f t

he me tho do log y

the Com mis sio n it se lf

c hose for

a c c ou nti ng fo r t

ho se

reve nues.” Pl.’s B rief at 55. As discussed elsew here above, the Commi ssion has broad discr etion

to choose a methodology for analy zing price eff

ects. Howeve r, the Commiss ion has not addre ssed

sever al of Celane se’s a

rg uments conce rning the rational connec tion betwee n cer tain cost structure

fi nd ing s ma de by

the Com mis sio n a

nd its fi nd ing that subj e c t impo rt s did not c on tr ibu te to t

he c os tprice squeeze. Pl.’s Brief at 52-56; De f.’s B rief at 54-57. 23Cou rt N o. 04- 0059 4 Pag e 44

[ ] . Pl.’s Reply

Br ief a t 22.

I n sum, the Commi s s i o n fo u n d t h at t h e d omestic industry ’s [ ] wer e 24 la rg e ly a re su lt o f C e la ne se ’s [ ], a nd that Ce la ne se ’s la c k o f p ro fi ta

bil ity was lar g ely

attributable to [ ]. Preliminary Deter mination at 29; Conf. Comm. Views at 47-48. Th e Com mis sio n, of c ou rs e , is no t re qu ir e d to ma ke e xplic it fi nd ing s wi th re sp ect to all

fac tors considere d. Calabrian Corp., 16 CI T at 350, 794 F . Supp. at 385. Howe ver, no c ourt ca n

rev ie w w h a t th e Co mm is s io n h a s n o t e xp r e s s e d

. A lt x, I n c

. v

. U n it e d St a te s , 2 6 CI T 1425, 1426

(2002). This matter

must be remande d to allow the Commiss ion to further explain the connection

be tw e e n c os t stru c tur e fa c tor s a nd its fi nd ingof no pr ic e su pp re ssi on

. Th e Com mis sio n s ha ll a lso

rec onsider it s finding s on price suppression and de pression, in light of a ny new c onclusions it may

rea ch on volume.

C. I mpact

Celanese ’s chief complaint about the Commi ssion’s impac t a naly sis is t h e C ommissi on’s

d e c is io n to c o n s id e r

a n d c o mp a r e th e [ ] of d o me s ti c p r o d u c e r s [ ]. 24

Pl.’s Br ief at 56-59. Celanese arg ues t hat, because the Commi ssion did not consider c ost structure

differ ence s in its causation analy sis in it s 2003 investiga tion, it may not do so here a

bsent a ra tional

explanation. Pl .’s B rief at 58; Pl

. ’s R ep l y Brief a t 23-27. Specifica lly , Celanese asser ts that the

“Commissi on’s dec ision to di sreg ard, w ithout ex planation or justification, its prior finding s was

arbitra ry .” Pl.’s Br ief a t 58.

As a thr e sh old ma tte r, it i s unc le a r to p re c ise ly wh a t “ fi nd ing s” Ce la ne se re fe rs . Ce la ne se

ma ke s n o a

rg ume nt, no r i s the re a ny e vid e nc e , th a t th e Com mis sio n ma de a n a ff ir ma tiv e fi nd inginCou rt N o. 04- 0059 4 Pag e 45

Celanese cites to Usinor for the proposi t i o n that “the Commission m ay not disreg ard 25 previous findings of a gene ral nature that bear direc tly upon the cur

rent re view.” U sinor v. United Sta te s, 26 CI T 7 67
, 79 2 (2 00 2)

. B ut Us ino r is dis tin g uis ha ble on its fa c ts f ro m th e sit

ua tio n in thi s
case . The finding s at issue in Usinor wer e broa der a nd more a ffirma tive, in that they ref err ed to a claim that Europe an countr ies wer e gene rally export-oriented – a

statement which the Commi ssion had subsequently

retra cted without explanation. See Comm. for Fa ir Be am I mports, 27 CI T at 947- 48 (discussing the “g ener al nature ” standa rd in Usinor). 2 0 0 3 t h a t c o s t s t r

u c t u r e d i f f e r e n c e s w e r e n o t a

c a u s e o f i n j u r y. T h er e i s no indication that the 25

Com mis sio n c ha

ng e d e ith e r i ts a

na ly tic fr a me wo rk

or its fa c tua l f

ind ing s.
“{ A}n ag ency

action is arbitra

ry when the a g ency

offe rs insufficie nt rea sons for tre ating

simil ar situa

ti o n s differ ently .” Consolidated B ear ings Co. v. United States, 348 F .3d 997, 1007 (F ed.

Cir. 2003) (citations omitted). Thus, it is ge nerally true that a

n ag ency must conform with prior

decisions or e x plain its departure . Citrosuco, 12 CI T at 1209, 704 F . Supp. at 1087. Howeve r, the

sta tut e dir e c ts the Com mis sio n to “ e va luate a ll r e le va nt e c on omi c fa c tor s, ” a nd

sta te s th a t it s ana ly sis

shall include (thoug h it is not nece ssarily limit ed to) a

list of certa in fac tor s . 19 U.S.C. §

1677(7)( C)(iii). Fur

thermore , the Commiss ion is required to c onsider t h es e fa ctors withi n the

context of the “business cy cle and conditions of competition tha t a re distinctive” to the industry

. Id.

Be cause the statute is silent on how mu ch weig ht to assign e ach of these fa ctors, and be cause the

Com mis sio n is c ha

rg e d w itha dmi nis te ri ng the sta tut e , th e Com mis sio n’ s c on str uc tio n o f t he sta tut e

is entitled to Chevron defe renc e. Nuc or Corp., 414 F .3d at 1336 ( citing C h ev ron U.S.A., I nc. v.

Natura l Res. Def. Council, I nc., 467 U.S. 837 (1984))

.
Whil e the Commission’s discretion is not absolute, Celanese’ s arg ument is larg ely without

merit. I t is well-established that the Commission’s material injury deter minations are su i ge ne ris

.

Nu c or Corp., 41 4 F .3 d a t 13 40 (“ Ea c h in jur y inv e sti g a tio n is su i ge ne ris

, involving a uniqueCou rt N o. 04- 0059 4 Pag e 46

Specifica lly , when e x amining the impact of imports on th e d omestic industry , the 26 Com mis sio n is re qu ir e d to e va luate a ll re le va nt ec on omi c fa c tor s whi c h ha ve a be a ri ng on the sta te of the ind us tr y in t he Un ite d St a te s, inc lud ing , b ut n ot l imi te d to : ( I ) a c tua l a nd po te nti a l de c lin e in

ou tpu t, s a le s, ma rk e t sh a re , p ro fi ts, pr od uc tiv ity , r e tur

n o n in ve stm e nts , a

nd uti liza tio n o f c a

pa c ity (I I ) fa ctors af

fec ting domestic pr ices, (I I I ) ac tual and potential neg ative ef fec ts on cash flow, inventories, employ

ment, wag es, g rowth, ability to raise c apital, and investment, (I V) a ctual and po te nti a l ne g a tiv e e ff

e c ts o n th e ex is tin g de ve lop me nt a nd pr od uc tio n e ff

or ts o f t he do me sti c industry , and (V) in an antidumping duty proce eding , the mag nitude of the mar g in of dumping. The fac tors must be evalua ted within the context of the business cy cle a nd conditions of competition that

are distinctive to the affe cted industry . 19 U.S.C. § 1677(7)(C)(iii)(I )-( V). combination and intera ction o f m any economic va

riables; and c onsequently , a par ticular

circ umstance in a

prior investig ation cannot be reg arde d by the {Commiss ion} a s dispositi ve of the

deter mination in a later investig ation.”) ( citations omitt ed). N or ar e “f indi n gs ” i n a prior r elated

deter mination of injury

g ener ally dispositi ve for purposes of subsequent investig ations. Citrosuco,

12 CI T at 1 2 1 7 , 7 04 F. Supp. at 1094 (w hether ear lier finding s of threa t materialized or not was

irrele vant to the investig ation at issue).

The c ausation ana ly sis in an ear lier investig ation thus does not set a pre cede nt for ca usation

a n a l y s i s i n a l a t t e r i n v e s t i g a t i o n o f t h e s a m e p r o d u c t

. C a r i b b e a n Is p a t Lt d

. v

. U n i t e d S t a t e s , 2 9 C IT

__, __, 366 F. Supp. 2d 1300, 1305 (2005), rev’ d on other grounds , 450 F.3d 1336 ( Fe d. Cir. 2006).

I ndeed, due to the “dy namic” nature of the g lobal economy , “the a g ency ’s finding s and

de te rm inatio ns a re ne c e ssa ri ly c on fi ne d to a

sp e c if ic pe ri od of inv e sti g a tio n w ithits a tte nd a nt,
peculiar set of cir cumstance s.” Comm. for Fa ir Be am I mports, 27 CI T at 944.

As noted above , in ex am ining the impac t of imports on the domestic industry , the

Com mis sio n is re qu ir e d to e va luate a ll re le va nt e c on omi c fa c tor s w hic h h a ve a be a ri ng on

the sta te
of the industry

in the United States, within the context of the particula r period of investiga tion. 19

U. S.C. § 1 67 7( 7) (C )( iii ). Whe the r o r n ot t he Com mis sio n co ns ide re d co st s tr uc tur e dif fe re nc e s in 26Cou rt N o. 04- 0059 4 Pag e 47

Celanese disputes the Commi ssion’s c laim that “no par ty arg ued that the c ost structure of 27

o n e o f th e d o me s ti c p r o d u c e r s v it iate d th e e n ti r e in d u s tr y ’ s in ju r y a r g u me n t in th e {2003} investiga tions,” and cites e vidence and ar g ument in the 2003 investiga tions urging the Commiss ion to consider Cela

nese’ s “excessive c osts.” Pl.’s Reply Br ief a t 25 ( citing Def

.’s Br i ef at 63). Howeve r, that evide nce me rely proposed Cela

nese’ s “excessive c osts” as one f ac to r to c o n s ider. See
, e.g. , Pl.’s Reply Br ief, Att. 3 (Post-Confere nce B rief of Wego Che mical & Mineral Corp. ( Oct. 2, 2002)) a t 1. the 2003 i nvestig ations is irrele vant. Equally irrele vant is whether

any of the pa rties in the pre sent

c a se a rg ue d th a t Ce la ne se ’s c os t stru c tur e dif fe re nc e s w e re c ri tic a l. See Pl.’s Brief at 25-26. 27

The fa ct that the Commissi on decide d to analy ze cost structure dif

fer ence s in the curr ent
investiga tion, even if it did not in 2003, does not undermine its finding here , beca use it is within t he

Com mis sio n’ s d isc re tio n to de te rm ine the sig nif ic a nc e of a pa rt ic ula r f a c tor ba se d o n a

re a so na ble

int e rp re ta tio n o f t

he e vid e nc e , a

nd be c a us e e a c h in

jur y inves ti ga tio n is su i ge ne ris . M a ine Pot a to

Council, 9 CI T at 300, 613 F. Supp. at 1244 ( citing S.Rep. 249, 96 Cong., 1 Sess. at 74-75 (1979)
, th st

reprinted in 19 79 U. S.C. C.A .N . 3 81 , 4 60 -6 1) ; A rm str on g B ro s. To ol C o. v. Un ite d St a te s, 84 Cus t.
Ct. 102, 115, 489 F. Supp. 269, 279 (1980).

A fa ctor that wa s less important in an ear lier investig ation may , in the context of a new

investiga tion covering overla pping but diff

ere nt y ear s and a dif

fer ent subject c ountry , become more
important. Here , the Commiss ion did not chang e its analy tical fra mewor k o r d i scount an e arlier

fi nd ing , b ut i ns te a d w e ig he d th e e vid e nc e in c on te xt an d u nd e r t he un iqu e c ir c ums ta nc e s o f t he c a se
as it is required to do.

Celanese cites Citrosuco for the f or the proposition that prior de cisions “nee d not be followed

if ‘new arguments or fac ts are pr esente d that support differ ent conc lusions’” but that “the

Commi ssion may

not act ar bitrarily and must e x plain rea sons f or any depar

ture.” Pl.’s Brief

at 58Cou rt N o. 04- 0059 4 Pag e 48

Celanese arg ues that the diff ere nt time pe riod is irr eleva nt beca use the c ost structure wa s 28 the same in

bo th t ime pe ri od s. Ho we ve r, the Com mis sio n is sp e c if ic a lly ma nd a te d to e va luate fa c tor s with in the c on te xt of the bu sin e ss c y c le a nd

c on dit ion s o f c omp e tit ion that a re dis tin c tiv e to the a ff e c te d in du str

y . 1 9 U .S. C. § 16 77 (7) (c)(iii) . D ue to c ha ng e s in ind us tr y c ir c ums ta nc e s, dif fe re nt f a c tor s ma y be c ome mor e or

le ss i mpo rt a nt. ( citing Citr os uc o, 12 CI T a t 12 09
, 70 4 F

. Sup p. a t 10 87 -8 8) . B ut C e la ne se ha s n ot m a de the re qu isi te
showing . I ndeed, the Com m ission has demonstrated that this case is not factually identical to the

pr ior inv e sti g a tio n th a t Ce la ne se c ite s.

The c urre nt investiga tion overlappe d with the 2003 investiga tions for the y ear s 2001 and

2 0 0 2

. Bu t i t d i d

n o t o v er l ap d

u ri n g t h e l at t er

h al f of t h e pe ri o d o f i n v es t i gat i o n , fr o m 2 0 0 3 t h ro u gh

interim 2004. Even if the f actor s were exact l y

the same f

or the two ove rlapping y ear s, the 28

Commi ssion would be well within its di scre tion to focus on the m ore rece nt period. Nuc or Corp.,

414 F.3d a t 1337 (“since the Commiss ion has broad disc retion to choose the most appropriate period

of time for its investig ation, it would be nonsensical to hold that once the Commi ssion had chosen

an investig ation period, it is require d to give equal we ight to imports t h ro u gh o u t t h e period it has

selec ted.”) . Moreove r, fa ctors we re not e x actly the same – for ex ample, the subject countrie s were

differ ent. See Comm. for Fa ir Be am I mports, 27 CI T at 947 (discussing the importance of diffe rent
subject countrie s as a f

actor in disti ng uishing mate rial injury investiga tions).

I n additio n , t he Commissi on pointed to differ ence s in volume, price e ffe cts, timing, and

other e conomic fa ctors as r easons for di ffe renc es between it s conclusions in the curr ent investig ation

compar ed to the 2003 investig ations. Preliminary Deter mination at 30; Conf. Comm. Views at 48-

49. Al t h o u gh the Commiss ion did not specify the other e conomic fa ctors conside red be y ond a

g ener al ref

ere nce to those “discussed above,” so long a s the path of the Commission’s reasoning mayCou rt N o. 04- 0059 4 Pag e 49

Specifica lly , Celanese arg ues that, while DuPont might ha ve bee n profitable, D uPont’s 29 [ ]. P l.’s Br ief a t 59; Pl .’s Reply Br ief a t 26-27. Celanese also denies that it fa iled to provide the Commiss ion with financial infor mation that it requested. Pl.’s Reply Br ief a t 24.

The Commission not ed the f act that the dome stic industry exported larg e volumes of PVA 30
at ave rag e unit values [ ] . Conf. Comm. Views at 47. be “rea sonably discerne d,” it is to be sust ained. Ceramica Re g iomontana, 810 F.2d a t 1139 ( citing

Bow man Tra

nsp., 419 U.S. at 286).

Ce la ne se dis mis se s a s post hoc rationalization the Commi ssion’s claim that the “f actua l

rec ords” of

the investig ations were sufficie ntly differ ent to justify differ ence s in its analy sis. Pl .’s

B ri e f at 23 -2 7. B ut t

he Com mis sio n’ s Pr e lim ina ry De te rm inatio n sp e c if

ic a lly e nu me rate d mu lti ple

fac tors distinguishing the investiga tions. Preliminary Deter mination a t 30; Conf. Comm. View s at

48-49. That the Commi ssion made no mention of the divide in the industry in the specific section

of the Preliminary Deter

mination dealing with impact does not nul lify the other f

actua l differ ence s
pointed out. See Def

.’s B rief at 63. The C ommissi on clea rly appre ciated the divided nature of the

industry , which wa s addre ssed throug hout the Commi ssion’s determination.

Celanese also contends that the Commission fa i l ed to respond to Celane se’s a rg ument

reg arding other ne g ative prof itability trends in the domestic industry

. Pl.’s Reply Br ief a t 26-27. 29

The Commission s imilarly failed to explain the connec tion between its neg ative impact f inding a nd

the fourth fac tor reg arding exports fr om the U.S. c ited in the Preliminary Deter mination. See Pl.’s

30

Br ief a t 57 n.177. On rema nd, the Commi ssion sha ll e labora te on these matter s, expl aining
, inter

ali a , (a) why

it found the profitabili t y t re nd to be not signific ant, and ( b) the sig nificanc e of the

exports noted.Cou rt N o. 04- 0059 4 Pag e 50

I n a thre at of mate rial injury deter mination, the Comm ission mus t find wh et h er “furthe r 31 du mpe d o r s ub sid ize d im

po rt s are imm ine nt a

nd wh e the r m a te ri a l in

jur y by re a so n o f i mpo rt s w ou ld

occur unless an orde r is issued.” 19 U.S.C. § 1677(7)(F )(ii ). T h e relevant fac tors outlined in the statute for a

finding of threa

t of materia l injury

include, but are not limi ted to: (I I ) any exis ting unused produc tion capac ity or i mminent, substantial incre ase in production capac ity in the exporting

c ou ntr y ind ic a tin g the lik e lih oo d o f sub sta nti a lly inc re a se d impo rt s o f t he su bje c t me rc ha

nd ise int o the United States, taking into account the a vailability

of other e x po rt m ar k et s to absorb any

a dd iti on a l e xpor

ts, (I I I ) a sig nif ic a nt r a te of inc re a se of the vo lum e or ma rk e t pe ne tr a tio n o f i mpo rt s of the subject merc handise indicating the likelihood of substantially

incre ased imports, (I V) whe ther imports of the subject mer chandise are enter ing at price s that are likely to have a

signific ant depre ssing or

suppressi n g ef

fe ct on domestic price s, and ar e likely to increa se dema

nd for f urther imp or ts, (V ) i nv e nto ri e s o f t

he su bje c t me rc ha

nd ise , ( VI I I ) the a c tua l a nd po te nti a l ne g a tiv e e ff

e c ts on the exist ing de velop m en t an d p roduction efforts of the dome stic industry , and (I X) a ny other demonstrable a dverse trends that indicate the proba bility that there is likely

to be mater ial injury

by

rea son of imports of the subject mer chandise (whe ther or n ot it is actua lly being imported at the time). 19 U.S.C. § 1677(7)(F )(i).

Fur ther, the Commission mus t evaluate the statutory fac tors “as a

whole” in making a thre at deter mination; and no particula r fac tor will “ nece ssarily g ive decisive g uidance with r espec t to the deter mination.” 19 U.S.C. § 1677(7)(F )(ii).

As the Commissi on noted her e, statutory threa t fac tor (I ) is inapplicable, b ecause no counter vailable subsidies ar e involved; st at u t o ry t h reat fac tor (VI ) is inapplicable, a s there is no

e vid e nc e of pr od

uc tio n fa c ili tie s in Ta iw a n that a re c ur re ntl y be ingus e d to pr od

uc e oth e r p ro du c ts that can be used to produce the subject mer chandise ; and statutory threa t fac tor (VI I ) is inapplicable, beca use no imports of ag ricultural pr oducts are involved. Preliminary Deter mination at 31 n.206; Conf. Comm. Views at 50 n.206. To the e xten t th a t th e Com mis sio n’ s im pa c t a na ly sis wa s b a se d o n c os t stru c tur e dif fe re nc e s,

it i s s u s t a i n e d

. T o t h e e xt e n t t h a t i t r e l i e d o n v o l u m e a n d p r i c e e f f e c t , t h e C o m m i ssi on sh a ll

rec onsider its finding in lig ht of its reconsider ed volume and pr ice e ffe ct finding s on remand.

D. Thre at

As a fi na l ste p in its ana ly sis , the Com mis sio n is re qu ir e d to de te rm ine wh e the r t he do me sti c
industry is threatene d with ma terial injury by rea son of subject imports. 19 U.S.C. § 1677(7)(F ). 31

Th e Com mis sio n is oblig a te d to con sid e r ce rt a in en ume ra te d fa c tor s, a mon g oth e r r e le va nt f a c tor s,Cou rt N o. 04- 0059 4 Pag e 51

T h e Co mm is s io n n o te d

th a t C CP C h a d

[ ] p r o d

u c ti o n c a p a c it y , a n d [ 32 ]. Def.’s B rief at 67. a s a wh ole in a sse ssi ng the po ssi ble thr e a t of imm in ent in

ju ry . B ut n o s ing le fa c tor is n e c e ssa

ri ly

deter minative. Moreove r, the Commission’s dete rmination must not be based on “me re c onjecture

or supposition.” Id.

Her e, the Commission m ade e x plicit findings on five re l ev an t mandatory fac tors: (1)

produc t ion capa city ; (2) volume or ma rket pe netra

tion of subject imports; (3) the suppre ssing or

depre ssing e ffe cts of subjec t imports on domestic price s; (4) inventories of the subject mer chandise ;
and (5) neg ative ef

fec ts on development and pr oduction of the domestic indust ry

. Def .’s B rief at 67-

72 ( citing Conf. Comm

. Vi ew s at 50-53). Celanese challeng es the Commission’s findings on

capa city , volume, price eff ects, a nd inventories.

1

. P r o d u c t i o n C a p a c i t y

Under the statute, the Commission was require d to assess any latent produc tion capac ity of

PVA in T a iw a n, a nd

the po ssi bil ity

of su bs ta nti a lly

inc re a se d im

po rt s to the Un ite d St a te s,
considering the availability of other export mar kets to a bsorb any additional exports. 19 U.S.C . §

1677(7)( F) . The Commission found tha t t h e ev idence on the produc tion capac ity of Chang Chun

PetroChemical Co. L td ( “CCPC ”), the only firm known to have produce d PVA products in Taiwa n
during the per iod of investigation, did not i ndicate a threa t. Def

.’s B rief at 67. 32

C e l a n e s e c h a l l e n g e s t h e C o m m i s s i o n ’ s f i n d i n g o n s u

b j e c t c o u n t r

y p r o d u c t i o n c a p a c i t y,
claiming that it is based on contra dictory evidenc e that fa ils to meet the c lear and convinc ing

s t a n d a r d
, a n d a s s e r t s t h a t t h e i s s u e r e q u i r e s f u r t h e r i n v e s t i g a t i o n

. P l

. ’ s B r i e f a t 6 1

- 6 4

. S p e c i f

i c a l l y,Cou rt N o. 04- 0059 4 Pag e 52

Celanese emphasizes CCP C’s last minute revisions. Pl.’s Brief at 62. 33

CCP C indicated that it [ ]. See Pl.’s Brief at 64 34 ( citing Staff Report a t VI I -2).

Whil e the Commission found that the volume of subject imports ha d incre ased, it weig hed 35 this ag ainst the conditi o n s o f compe tition and the lack of pr ice e ffe ct. I t also noted that subject import volum e s f

r o m T a iw a n d id n o t in c r e a s e s ig n if ic a n tl y d u r in g th e p e r io d o f in v e s ti g a ti o n or during the most rece nt period wh en they had opportunities to do so, such as shortly afte r the termination of the a

ntidumping duty

order on PVA imports fro m T ai wa n in 2001 or afte r the imp os iti on

of the a nti du mpi ng du ty

or de rs on

PVA imp or

ts f ro m Ch ina , K or e a , a

nd Japa n in July 2003 (Japan) and O ctober 2003 (China and Kore a). Preliminary Deter mination a t 31 n.208; Conf. Celanese char g es that the Commission s h o u ld have r ejec ted CCPC ’s data a s not credible. Pl.’s 33

Br ief a t 62. But Celane se’s a rg ument is without m erit. As discussed a bove, the Comm i s sion has

g r e a t d i s c r e t i o n t o w e i g h t h e p r o b a t i v e v a l u e o f c o n t r a d i c t o r

y e v i d e n c e

. C o n n

. S t e e l C o r p

. , 1 8 C IT

a t 31 5, 85 2 F . Su

pp . a t 10 64 ; see also Am. L amb C o., 785 F.2d at 1002-04. There is no indication

that the Commiss ion was ar bitrary in its analy sis here.

Celanese ’s ar g ument as to the alleg ed contr adictory nature of CCPC ’s evidenc e re g arding

[ ] l i k ew i s e fa i l s

. C el an es e o ffe rs nothing mor e than its own

speculation that CC PC wil l not be able to do as it plans. And a thre at deter mination cannot be 34

based on a “m er e co n

j ecture or supposition.” 19 U.S.C. § 1677(7)(F )(ii). More over, e ven firm

e vid e nc e of

inc re a se d c a

pa c ity do e s n ot n e c e ssa

ri ly imp ly inc re a se d e xpor ts to the Un ite d St ates.
Am. Spring Wire Corp. v. United States, 8 CI T 20, 28, 590 F. Supp. 1273, 1281 (1984)

.

2. & 3. Vo lum e a nd

Pr ic e Ef fe c ts

I n its volum e and pr ic e e f

f e c ts f in d in g s r e g a

r ding thr eat, the Commission specifica lly ref err ed

to its fi nd ing s on the c on dit ion s of c omp e tit ion a s mu tin g the imp a c t of e a rl ie r i nc re a se s in

vo lum e
in determining no evidenc e of substantially incre ased imports in the nea r future

. Preliminary

35Cou rt N o. 04- 0059 4 Pag e 53

Comm. Views at 51 n.208.

Ce la n e s e s in g le s o u t [ ]. 36 Deter mination at 31-32; Conf. Comm. Views at 52. The Commissi on further ref err ed to the above

finding s and its findings on pr ice e ffe cts, su pr a , to support its finding of no e vidence of suppre ssing

or depr essing price eff

ects. Additionally
, the C ommissi on found no evide nce tha t the conditions of

competition in the U.S. market would cha ng e in such a way as to ma ke any incre ase more sig nificant

in the future. B eca

use ea ch of these finding s may be subjec t to chang e on re mand, judicial re view

of the Commission’s volum e and pr ice e ffe cts finding s would be inappropr iate at this time.

4. I nventory

The Commission found that e nd-of- period inventories of subject PVA in Taiwan de clined

throug hout the period of inve stiga tion and wer e proje cted to continue declining in 2004 and 2005.

Preliminary

Deter mination at 31; Conf. Comm. View s at 51. I n addition, the Commi ssion found that

imp or te rs ’ e nd -o f- pe ri od in ven tor ie s o f s ub je c t PV A i n th e Un ite d St a te s w e re re la tiv e ly sta ble

throug hout the period o f i n v es t igation and wer e proje cted to re main stable in 2004 and 2005.

Preliminary

Deter mination at 32; Conf. Com m. Views at 52-53.

Celanese challeng es the Commission’s inventory analy sis as based on data f rom importers

that Celanese contends “ lacks c redibility on its face. ” Pl.’s Br ief a t 67; Pl .’s Reply Br ief a t 30.

Celanese targ ets the i nventory data of one im porter, disparag ing it as a mere estimate ra ther than 36

confirme d values. How ever , the Commis s i o n reg ularly instructs companies to provide estimates

when una ble to supply

information “in exactly

the form r equest ed

. ” C o nn. Steel Corp. v. United

States, 30 CI T __, __, 462 F. Supp. 2d 1322, 1331 (2006)

.Cou rt N o. 04- 0059 4 Pag e 54

Celanese simil arly

disputes the information supplied by a second importer a s incomplete and

la c kin g c re dib ili ty

. Pl. ’s B ri e f a t 67

. Ce la ne se a sse rt s that the imp or te r’ s c la im r e g a rd ingthe lim its

o f it s d a ta a r e u n b e li e v a

b le
, a n d a r g u e s th a t th e Co mm is s io n f a il e d to th o r o u g h ly in v e stiga te (a s

Celanese arg ues it wa s require d to do)

. Id. Acc ording to Celanese
, this “lac k of data

. . . , combined

with the likelihood that additional data could b e obtained by the time of the fina l determination,

require s the Commis sion to continue the ca se.” Id.

Celanese is ag ain ar g uing tha t the Commi ssion should have arr ived at a dif fer ent conc lusion

based on de terminations as to the cre dibilit y of fac ts tha t unde rlie the Commission’s analy sis. As

in a mater ial injury

deter mination, in making its threa t deter mination the Comm ission “is afforde d

discretion in inter

preting the data, and the court does not w eig h the evidenc e.” U.S. Steel Group,18

CI T at 1224, 873 F . Supp. at 703 (citations omitted). I n other wor ds, judicial review “does not

extend bey ond deter

mining whether the Commi ssion ha s acte d within its deleg ated a uthority and has

corr ectly interpre ted and a

pplied the law.” Ba

ndo Chem. I ndus., L td. v. United States, 17 CI T 798,

802 (1993).

As to C e la ne se ’s c la im t ha t “ c on tr a ry e vid e nc e ” wi th r e sp e c t to inv e nto r i e s w ou ld l ike ly a ri se
in a final investig ation, Celanese does not sug g est with any particula rity what that evide nce mig ht

be. I ndeed, thr oug hout its briefs, Celanese repe atedly asser ts the need f

or “a d d i t i o n al evidenc e.”

Howeve r, as e stablished by Am. L amb Co., the standar d for a p re l i m inary injury deter mination

require s the Commis sion to determine whe ther “ (1) the r ecord as a w hole contains c lear and

convincing evidenc e that ther e is no materia l injury or threat of such injury ; and (2) no likelihood

e xists tha t contrary evidenc e will arise in a final investigation.” A m. L amb Co., 785 F.2d a t 1001Cou rt N o. 04- 0059 4 Pag e 55

T h e Co mm is s io n n o te d

th a t th e d o me s ti c in d

u s tr y [ 37 ]; and, althoug h Celanese repor ted

a c tu a l a n d a n ti cipated [ ], [ ]. Preliminary

Deter mination at 31-32; Conf. Comm. Views at 53. (empha sis added). Mor eover , the Commiss ion must m ake its dec ision based on t h e evidence

available at the time. Co-Steel Raritan, 357 F .3d at 1313 (“ The C o mmissi on will investigate the

a lle g a tio ns in the pe tit ion in a s tho ro ug h a ma nn e r a s p os sib le us ingthe inf or ma tio n a va ila

ble wi thi n

that time pe riod

. . .”) ( citing Am. L amb Co., 785 F.2d a t 1003 ( quoting H.R. Rep. No. 96-317, at

61 (1979)) ).

5. Deve lopment and Production

Finally
, the C ommissi on found no rea sonable indi cation that subject imports would have a n

actua l or potential neg ative ef fec t on the domestic industry ’s exist ing de velopment and pr oduction

eff orts. Preliminary

Deter mination at 31; Conf. Com m. Views at 53. The statute requir es a c ausal 37

link between a

threa t of m ater ial injury finding and subj ect imports. 19 U.S.C. § 1673d(b)(1). The

re c or d be fo re the Com mis sio n re fl e c ts a nu mbe r o f f a vo ra ble c on dit ion s p e rt a ini ng to t he do me sti c
industry (in addition to some neg ative tre nds). B ased on the rec ord as whole, the re is no indication

that t h e C o m m i s s i o n ’ s d e t e r m i n a t i o n o n t h i s i s s u e w a s i n a n y w a y u n r e a s o n a b l e o r fa c tua lly

unsupportable.Cou rt N o. 04- 0059 4 Pag e 56

V. Conclusion

For the re asons set for

th above, Plaintiff’s Motion for Judgment Upon the Ag ency Record

is gr anted in par

t, and this action is remande d to the Commi ssion for fu rt her a ction in acc ordanc e
with this opi nion.

__________________________________ Delissa A. Ridg way J u d ge
Dated: January

29, 2007 New Y ork, Ne w YorkUNITED STATES COURT OF INTERNATIONAL TRADE



### C ELANESE 

### C HEMICALS 

### L TD 

### ., :
Plaintiff , :

v. :



### U NITED 

### S TATES 

### , : Court No. 04-00594 Defendant,

: and

: 

### E.I. D U 

### P ONT DE 

### N EMOURS 

### & C O



### . and 

### C HANG 

### C HUN 

### P ETRO 

### C HEMICAL 

### C O 

### ., L TD 

### ., :
Defendant-Intervenors . :



### ORDER

In accordance with the opinion of the Court issued this date in this matter, it is hereby

ORDERED that this matter is remanded to the U.S. International Trade Commission for further proceedings not inconsistent with that opinion; and is further

ORDERED that the Commission shall file the resu lts of this remand with the Court no later than March 30, 2007; and it is further

ORDERED that any comments on those results shall be filed no later than April 30, 2007; and it is further

ORDERED that the Commission’s response to any comments shall be filed no later than 21 days after the filing of those comments.

________________________________ Delissa A. Ridgway, Judge

Dated: January 29, 2007 New York, New York