Slip Op. 04-147 

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: HONORABLE RICHARD W. GOLDBERG, SENIOR JUDGE

UNITED STATES STEEL

CORPORATION and ISPAT INLAND

INC.,

Plaintiffs,

v.

UNITED STATES,

Defendant,

and

USINAS SIDERURGICAS DE MINAS

GERAIS S/A, COMPANHIA

SIDERURGICA PAULISTA,

COMPANHIA SIDERURGICA

NACIONAL, THAI COLD ROLLED

STEEL SHEET PUBLIC COMPANY

LIMITED, ISCOR, LTD., NIPPON

STEEL CORPORATION, JFE STEEL

CORPORATION, SUMITOMO METAL

INDUSTRIES, LTD., KOBE STEEL,

LTD., NISSHIN STEEL COMPANY,

LTD., EREGLI DEMIR VE CELIK

FAB. T.A.S., and SHANGHAI

BAOSTEEL GROUP CORPORATION,

 Defendant-

 Intervenors.

 

 Cons. Ct. No. 00-00151

[ITC’s negative injury remand determination sustained.]

Date: November 18, 2004

Skadden, Arps, Slate, Meagher & Flom LLP (John J. Mangan) for

plaintiffs United States Steel Corporation and Ispat Inland Inc.
Cons. Ct. No. 00-00151 Page 2

1

 Plaintiffs Bethlehem Steel Corporation and National Steel

Corporation were voluntarily dismissed from this action in an

order entered by the Court on July 7, 2004. Plaintiff LTV Steel

Company, Inc. was voluntarily dismissed from this action in an

order entered by the Court on November 18, 2004.

James M. Lyons, Acting General Counsel, Marc A. Bernstein, Acting

Asst. General Counsel for Litigation, U.S. International Trade

Commission (Michael Diehl), for defendant United States.

Willkie Farr & Gallagher LLP (William H. Barringer, James P.

Durling, Kenneth J. Pierce, Matthew R. Nicely, Christopher A.

Dunn, and Robert E. DeFrancesco) for defendant-intervenors Usinas

Siderurgicas de Minas Gerais S/A, Companhia Siderurgica Paulista,

Companhia Siderurgica Nacional, Thai Cold Rolled Steel Sheet

Public Company Limited, Nippon Steel Corporation, JFE Steel

Corporation, Sumitomo Metal Industries, Ltd., Kobe Steel, Ltd.,

and Nisshin Steel Company, Ltd. 

Wilmer Cutler Pickering LLP (Kristin H. Mowry) for defendantintervenor Iscor, Ltd.

Law Offices of David L. Simon (David L. Simon) for defendantintervenor Eregli Demir ve Celik Fab. T.A.S.

Greenberg Traurig, LLP (Philippe M. Bruno) for defendantintervenor Shanghai Baosteel Group Corporation.

OPINION

GOLDBERG, Senior Judge: This case is before the Court following

remand to the United States International Trade Commission

(“ITC”). In Bethlehem Steel Corp. v. United States, 27 CIT __,

294 F. Supp. 2d 1359 (2003) (“Bethlehem I”), familiarity with

which is presumed, the Court remanded the ITC’s determinations

with respect to plaintiffs Bethlehem Steel Corporation, Ispat

Inland Inc., LTV Steel Company, Inc., United States Steel

Corporation, and National Steel Corporation1

 in Certain ColdRolled Steel Products From Argentina, Brazil, Japan, Russia,
Cons. Ct. No. 00-00151 Page 3

2

 The Court also instructed the ITC to clarify on remand how

it complied with the statutory framework of both 19 U.S.C. §

1677e(a) and 19 U.S.C. § 1677m(d) for applying facts otherwise

available. This issue is not presently before the Court since

the ITC afforded the domestic producers and purchasers an

opportunity to provide additional data during the remand

investigations, and the parties no longer dispute whether the ITC

complied with the statutory framework for applying facts

otherwise available.

South Africa, and Thailand, 65 Fed. Reg. 15008 (Mar. 20, 2000),

Certain Cold-Rolled Steel Products From Turkey and Venezuela, 65

Fed. Reg. 31348 (May 17, 2000), and Certain Cold-Rolled Steel

Products From China, Indonesia, Slovakia, and Taiwan, 65 Fed.

Reg. 44076 (July 17, 2000) (collectively “Final Determinations”).

In Bethlehem I, the Court found that the ITC’s

interpretation of the captive production provision, see 19 U.S.C.

§ 1677(7)(C)(iv), was not in accordance with law. Specifically,

the Court determined that the ITC’s definition of “internal

transfers” was unreasonable. Accordingly, the Court remanded the

Final Determinations to the ITC to define “internal transfers”

consistent with the will of Congress. The Court also instructed

the ITC that, if it found the captive production provision to be

applicable on remand, it would be required to consider primarily

the merchant market in its “material injury” analysis under 19

U.S.C. §§ 1677d(b) and 1673d(b).2

The ITC duly complied with the Court’s order. After

allowing the domestic producers and purchasers to provide

additional data relating to the captive production provision, the
Cons. Ct. No. 00-00151 Page 4

3 The response was submitted on behalf of Nippon Steel

Corporation, JFE Steel Corporation, Sumitomo Metal Industries,

Ltd., Kobe Steel, Ltd., Nisshin Steel Co., Ltd., and Thai Cold

Rolled Steel Sheet Public Co., Ltd.

ITC issued the Views of the Commission on Remand (Apr. 30, 2004)

(“Remand Results”). In the Remand Results, the ITC determined

that the captive production provision was applicable, but further

found that the domestic industry was not materially injured, or

threatened with material injury, by reason of imports of certain

cold-rolled steel products that the United States Department of

Commerce found to be subsidized and/or sold at less than fair

value in the United States.

United States Steel Corporation (“U.S. Steel”) submitted

Comments on the U.S. International Trade Commission’s

Redetermination Pursuant to Court Remand (“Pl.’s Comments”), and

the ITC submitted Reply Comments in Defense of its Remand

Determination (“ITC’s Reply”). Defendant-Intervenors also

submitted a Response to Plaintiffs’ Comments (“Def.-Intvrs.’

Response”).3

The Court has jurisdiction pursuant to 28 U.S.C. § 1581(c). 

After due consideration of the parties’ submissions, the

administrative record, and all other papers had herein, and for

the reasons that follow, the Court sustains the Remand Results.
Court No. 00-00151 Page 5

I. STANDARD OF REVIEW

The Court must sustain the Remand Results unless it is

“unsupported by substantial evidence on the record, or otherwise

not in accordance with law.” 19 U.S.C. § 1516a(b)(1)(B). 

Substantial evidence means “such relevant evidence as a

reasonable mind might accept as adequate to support a

conclusion.” Pierce v. Underwood, 487 U.S. 552, 565 (1988)

(citation omitted). Moreover, “the possibility of drawing two

inconsistent conclusions from the evidence does not prevent an

administrative agency’s finding from being supported by

substantial evidence.” Matsushita Elec. Indus. Co. Ltd. v.

United States, 750 F.2d 927, 933 (Fed. Cir. 1984) (citation

omitted).

The reviewing court may not, “even as to matters not

requiring expertise . . . displace the [agency’s] choice between

two fairly conflicting views, even though the court would

justifiably have made a different choice had the matter been

before it de novo.” Universal Camera Corp. v. NLRB, 340 U.S.

474, 488 (1951). In this regard, “the court may not reweigh the

evidence or substitute its judgment for that of the ITC.” 

Dastech Int’l, Inc. v. USITC, 21 CIT 469, 470, 963 F. Supp. 1220,

1222 (1997).
Court No. 00-00151 Page 6

II. DISCUSSION

A. The ITC Reasonably Concluded that the Subsidized and/or LTFV

Imports Did Not Affect Domestic Prices.

All parties agree that “[t]he central issue in these

investigations is the role, if any, of subject imports in the

price declines in the domestic market.” Remand Results at 17;

Pl.’s Comments at 4; Def.-Intvrs.’ Response at 2. In evaluating

the price effects of the subject imports, the ITC examines

whether:

(I) there has been significant price underselling by

the imported merchandise as compared with the

price of domestic like products of the United

States, and

(II) the effect of imports of such merchandise

otherwise depresses prices to a significant degree

or prevents price increases, which otherwise would

have occurred, to a significant degree.

19 U.S.C. § 1677(7)(C)(ii).

1. Evidence of Underselling Is Not a Per Se Indication of

Injury.

U.S. Steel points to the pricing data for three specific

items collected by the ITC, which “leaves no doubt that subject

imports almost always undersold the domestic like product[.]” 

Pl.’s Comments at 4-5. From 1996 to 1997, the ITC made 268

comparisons and found 211 instances of underselling. Id. at 5. 

Similarly, from 1998 to the third quarter of 1999, the ITC made

319 comparisons and found 287 instances of underselling. Id.

According to U.S. Steel, “[t]hese data – which must be considered

by law – compel the conclusion that subject imports had a
Court No. 00-00151 Page 7

significant depressing effect on domestic prices.” Id. (emphasis

added).

To the extent U.S. Steel contends that evidence of

underselling is a per se indication of injury, its argument

fails. Coalition for the Pres. of Am. Brake Drum & Rotor

Aftermarket Manufacturers v. United States, 22 CIT 520, 526, 15

F. Supp. 2d 918, 924 (1998). “Evidence of underselling alone is

legally insufficient to support an affirmative injury

determination.” BIC Corp. v. United States, 21 CIT 448, 458, 964

F. Supp. 391, 401 (1997), aff’d, App. No. 97-1443 (Fed. Cir.

1998). “Rather, the [ITC] has a statutory mandate to consider

not only whether the subject imports have significantly undersold

the domestic like product, but also how the subject imports

effect [sic] the prices of the domestic like product.” Id.

The ITC has considerable discretion in interpreting the

evidence and determining the overall significance of any

particular factor in its analysis. Coalition, 22 CIT at 527, 15

F. Supp. 2d at 925. “The significance of the various factors

affecting an industry will depend upon the facts of each

particular case. Neither the presence nor the absence of any

factor listed in the bill can necessarily give decisive guidance

with respect to whether an industry is materially injured, and

the significance to be assigned to a particular factor is for the

ITC to decide.” S. Rep. No. 249 at 88 (1979), reprinted in 12979
Court No. 00-00151 Page 8

U.S.C.C.A.N. 381, 474.

Here, the ITC did not neglect the evidence of underselling,

but found that competition between subject imports and the

domestic like product was “attenuated by differences between the

two in various non-price factors[.]” Remand Results at 16-17

(“While underselling has existed throughout the period, we find

that the persistent price gap between subject imports and

domestic prices is largely due to various differences between the

domestic and imported products . . . .”).

2. The ITC’s Finding that Underselling Did Not Have a

Significant Effect on Domestic Price Levels Is

Supported by Substantial Evidence and Otherwise in

Accordance with Law.

First, the ITC found that “[a]ccording to purchasers,

quality, availability, and delivery are the most important nonprice factors when choosing a supplier . . . .” Remand Results

at 17-18. U.S. Steel argues that the ITC never found a

significant difference in quality between the domestic product

and the subject imports. Pl.’s Comments at 6. This argument is

irrelevant, as the ITC explicitly noted that “purchasers

overwhelmingly listed quality as the most important factor in

purchasing decisions.” Remand Results at 18 n.72. Moreover,

price was listed as the most important factor by only three of

the thirty purchasers. Id.

Second, the ITC found that “when purchasers find a reliable

supplier, they rarely change.” Id. at 18. On a related note,
Court No. 00-00151 Page 9

the ITC found that “[t]he stablility of supplier-purchaser

relationships . . ., even in the face of price fluctuations, can

be seen in the prevalence of the honoring of contracts . . . .” 

Id. U.S. Steel contends that, in fact, supplier-purchaser

relationships were not stable. Pl.’s Comments at 7. U.S. Steel

points out that the domestic industry lost significant sales to

subject imports, and furthermore that U.S. producers were forced

to renegotiate nearly one-fifth of their contract sales. Pl.’s

Comments at 7-8. U.S. Steel’s argument ignores the fact that the

domestic industry consciously decided to captively consume more

cold-rolled steel to produce more lucrative downstream products,

like galvanized steel. Joint Respondents’ Pre-hearing Brief at

57-58, P.R. 420. Regarding the stability of contracts, the ITC

found that more than four-fifths of domestic producers’ contract

sales were honored, despite severe price declines in the coldrolled steel market. Remand Results at 18.

Third, the ITC found that “subject import prices have

generally continued to decline in 1999, while domestic prices

have recovered in certain important segments.” Id. at 19. U.S.

Steel counters that there was no “recovery” in domestic prices

and cites to evidence showing that “while domestic prices . . .

improved slightly from Q2 1999 to Q3 1999, those prices remained

well below prices for Q3 1998.” Pl.’s Comments at 8. What is

clear, however, is that domestic prices actually increased during
Court No. 00-00151 Page 10

the period when underselling was at its greatest. See Def.-

Intvrs.’ Response at 10.

Fourth, the ITC found that “purchasers generally regard

domestic producers as being the price leaders in the market . . .

.” Remand Results at 19. U.S. Steel argues that, because only

16 of 41 purchasers reported being able to identify a price

leader, it is plainly not correct that purchasers “generally”

regard domestic producers as the price leader. Pl.’s Comments at

9. The Court finds as the ITC pointed out, that no purchaser

mentioned any subject importer or subject producer as a price

leader. Remand Results at 19.

Accordingly, the Court holds that the ITC’s finding that

underselling did not have a significant effect on domestic price

levels is supported by substantial evidence and otherwise in

accordance with law.

B. The ITC’s Finding that the Persistent Price Gap Between

Subject Imports and the Domestic Like Product Was Due to

Factors Other than Underselling Is Supported by Substantial

Evidence and Otherwise in Accordance with Law.

The ITC found that the decline in domestic prices was a

result of other competitive conditions, specifically: (1) growing

competition within the domestic industry; (2) the decline in hotrolled steel prices; and (3) a strike at General Motors

Corporation (“GM”).

First, the ITC determined that “the large and growing number

of domestic participants in [the cold-rolled steel] market has
Court No. 00-00151 Page 11

4

 Minimills use scrap, as opposed to slab, as the primary

input for hot-rolled steel. Def.-Intvrs.’ Response at 12. Hotrolled steel, in turn, is the primary input for cold-rolled

steel. Id. Thus, the decline in scrap prices noted by the ITC

enabled minimills to reduce their prices for cold-rolled steel. 

Id.

increased competition within the domestic industry . . . .” 

Remand Results at 20. U.S. Steel contends that the increase in

domestic producers was minimal. Pl.’s Comments at 10-11. The

ITC based its finding on “the competitive advantages accruing to

minimills and the decline in scrap prices during the period under

investigation.” Remand Results at 20. The Court finds that the

ITC reasonably determined that cold-rolled steel produced by

minimills exerted downward pressure on domestic prices, despite

their small number and size, because of their different

production inputs.4 See id. None of the other arguments

presented by U.S. Steel undercuts the substantial evidence

supporting the ITC’s finding.

Second, the ITC found that a “decline in hot-rolled prices

likely put downward pressure on the domestic industry’s coldrolled prices. This downward pressure is likely [in part]

because of the historic relationship between hot-rolled costs and

prices and cold-rolled prices . . . .” Id. The ITC further

noted that “[f]alling hot-rolled prices have been particularly

beneficial to re-rollers, who purchase, rather than produce, hotrolled steel for cold-rolling.” Id. U.S. Steel argues that
Court No. 00-00151 Page 12

there is “no evidence that hot-rolled prices caused the decline

in cold-rolled prices.” Pl.’s Comments at 13. Furthermore, U.S.

Steel disputes the notion that re-rollers, rather than imports,

drove down domestic prices, pointing out that re-rollers only

accounted for a very small percentage of domestic production in

1998, and that imports frequently undersold re-roller shipments

in 1998 and interim 1999. Id. at 12. To support its finding,

the ITC cited the testimony of Jim Bouchard, a witness for U.S.

Steel, who stated:

If you look at hot roll versus cold roll, specifically,

if you question over the past 20 years the relation

between pricing has rotated between $95 a ton from hot

roll, cold roll being $95 to about $110 a ton. The

relationship has stayed intact the past 20 years and

right now is running between $100 to $110.

Remand Results at 21 n.89. The Court finds that this historical

relationship has not been rebutted by evidence in the record. 

Nor can it be established that this historical relationship is

not present in this case. Moreover, the ITC reasonably

determined that cold-rolled steel produced by re-rollers exerted

downward pressure on domestic prices, despite the low percentage

of total production that they constitute. Id. at 20.

Third, the ITC identified a strike at GM lasting from June 5

to July 30, 1998, as yet another factor contributing to the

decline in domestic prices. Id. at 21. Approximately 80 percent

of overall GM purchases of flat-rolled steel products are of

cold-rolled and corrosion-resistant steel. Id. As a result of
Court No. 00-00151 Page 13

the strike, GM estimated that 685,000 tons of flat-rolled steel

products (550,000 tons of which were cold-rolled steel) were not

purchased by GM or its suppliers. Id. U.S. Steel contends that

subject imports had a greater impact on cold-rolled domestic

prices than the GM strike. Pl.’s Comments at 14. It is

undisputed, however, that the fall in domestic shipments as a

result of the GM strike was greater than the rise in subject

imports in 1998. See id. at 14-15; Def.-Intvrs.’ Response at 17-

18. Furthermore, the ITC noted that the majority of domestic

producers and importers reported that the strike “had a

significant effect on the market in 1998, temporarily reducing

demand and causing an oversupply of cold-rolled steel products.” 

Remand Results at 21.

Accordingly, the Court holds that the ITC’s finding that the

price gap between domestic cold-rolled steel and subject imports

was due to growing competition within the domestic industry, a 

decline in hot-rolled steel prices, and a strike at GM is

supported by substantial evidence and otherwise in accordance

with law.
Court No. 00-00151 Page 14

III. CONCLUSION

For the foregoing reasons, the Court sustains the ITC’s

Remand Results. Judgment will be entered accordingly.

/s/ Richard W. Goldberg 

Richard W. Goldberg

Senior Judge

Date: November 18, 2004

New York, New York