SIDERCA, S.A.I.C.,

Plaintiff,

v.

UNITED STATES, 

Defendant,

 and

UNITED STATES STEEL CORP.,

Defendant-Intervenor.

Slip Op. 04-133

United States Court of International Trade

 

 Before: Pogue, Judge

 Court No. 01-00603

[Plaintiff’s motion for judgment on the agency record is denied.

The Court sustains the International Trade Commission’s sunset

review determination in part, and remands in part.]

Decided: October 27, 2004

White & Case, LLP (David P. Houlihan, Gregory J. Spak, Richard J.

Burke, Lyle B. Vander Schaaf, Joanna M. Ritcey-Donohue) for

Plaintiff.

James M. Lyons, Acting General Counsel, Robin L. Turner, Acting

Assistant General Counsel for Litigation, Peter L. Sultan,

Attorney Advisor, United States International Trade Commission,

for Defendant.

Skadden, Arps, Slate, Meagher & Flom LLP (Robert E. Lighthizer,

John J. Mangan, James C. Hecht, Stephen P. Vaughn) for DefendantIntervenor.

OPINION

Pogue, Judge: Plaintiff Siderca, S.A.I.C. (“Siderca”)

challenges determinations made by Defendant, the U.S. International

Trade Commission (“the ITC”) in the sunset review of antidumping
Court No. 01-00603 Page 2

orders on certain standard, line, and pressure pipe (“SLP”) from

Argentina, Brazil, Germany, and Italy. Plaintiff, an Argentine

producer of SLP, specifically challenges the ITC’s cumulation of

Argentine SLP with that of Brazil and Germany, and the ITC’s

finding that material injury to U.S. producers of SLP is likely to

recur in the event of revocation of the antidumping orders.

Plaintiff alleges that these determinations are not in accordance

with law and unsupported by substantial evidence. Because the

Court finds that the record does not disclose whether the ITC

employed the correct legal standard in finding a likelihood of

recurrence of material injury, the Court remands. In addition, for

reasons of judicial economy, the Court also considers whether,

given the correct legal standard, substantial evidence supports the

ITC’s determinations. While the Court finds that the ITC’s

cumulation decision is supported by substantial evidence on the

record, the Court finds that the ITC’s finding of a likelihood of

recurrence of material injury is not so supported, and remands this

determination for further consideration.

BACKGROUND

In August of 1995, pursuant to the ITC’s finding that U.S.

producers of SLP were being materially injured by competition from

dumped imports, the United States Department of Commerce imposed

antidumping orders on SLP from Argentina, Brazil, Germany, and
Court No. 01-00603 Page 3

1Title 19 U.S.C. § 1675a(a)(1) states, in part: 

(1) In general. 

 In a [sunset review], the Commission shall determine whether

revocation of an order, or termination of a suspended

investigation, would be likely to lead to continuation or

recurrence of material injury within a reasonably foreseeable

time. The Commission shall consider the likely volume, price

effect, and impact of imports of the subject merchandise on the

industry if the order is revoked or the suspended investigation

is terminated.

Italy. See Certain Small Diameter Seamless Carbon and Alloy Steel

Standard Line and Pressure Pipe from Argentina, 60 Fed. Reg. 39,708

(Dep’t Commerce Aug. 3, 1995) (notice of antidumping duty order),

Certain Small Diameter Seamless Carbon and Alloy Steel Standard

Line and Pressure Pipe from Brazil, 60 Fed. Reg. 39,707 (Dep’t

Commerce Aug 3, 1995) (notice of antidumping duty order and amended

final determination), Certain Small Diameter Seamless Carbon and

Alloy Steel Standard Line and Pressure Pipe from Germany, 60 Fed.

Reg. 39,704 (Dep’t Commerce Aug. 3, 1995) (notice of antidumping

duty order and amended final determination), Certain Small Diameter

Seamless Carbon and Alloy Steel Standard Line and Pressure Pipe

from Italy, 60 Fed. Reg. 39,705 (Dep’t Commerce Aug. 3, 1995)

(notice of antidumping duty order). Five years later, pursuant to

19 U.S.C. § 1675(c) (2000), the ITC instituted a sunset review to

determine whether revocation of the antidumping orders would likely

lead to the recurrence of material injury to U.S. SLP producers

within a reasonably foreseeable period of time. See 19 U.S.C. §

1675a(a)(1)1; Seamless Pipe from Argentina, Brazil, Germany, and
Court No. 01-00603 Page 4

19 U.S.C. § 1675a(a)(1).

2Title 19 U.S.C. § 1675a(a)(7) states: 

(7) Cumulation

 For purposes of this subsection, the Commission may

cumulatively assess the volume and effect of imports of the

subject merchandise from all countries with respect to which

[sunset reviews] were initiated on the same day, if such imports

would be likely to compete with each other and with domestic like

products in the United States market. The Commission shall not

cumulatively assess the volume and effects of imports of the

subject merchandise in a case in which it determines that such

imports are likely to have no discernible adverse impact on the

domestic industry.

19 U.S.C. § 1675a(a)(7).

Italy, 65 Fed. Reg. 41,090 (ITC July 3, 2000) (institution of fiveyear reviews concerning the countervailing duty and antidumping

duty orders on seamless pipe from Argentina, Brazil, Germany, and

Italy). 

In the course of the review, the ITC made two determinations

which Plaintiff now challenges. First, pursuant to 19 U.S.C. §

1675a(a)(7), the ITC decided to assess the volume and effect of

imported SLP from three of the four countries, including Argentina,

cumulatively. See 19 U.S.C. § 1675a(a)(7)2; Certain Seamless

Carbon and Alloy Steel Standard, Line, and Pressure Pipe from

Argentina, Brazil, Germany and Italy, Investigations Nos. 701-TA362 and 731-TA-707-710 (Review) (July 2001), Pl.’s Ex. 3 at 12-13

(“Commission’s Views”); Pl.’s Initial Br.: Mem. of P. & A. in Supp.

of Pl.’s Mot. for J. on the Agency R. at 13, 20 (“Pl.’s Br.”).
Court No. 01-00603 Page 5

Second, having cumulated the volume and effect of imported SLP from

three of the four reviewed countries, the ITC found that these

cumulated imports would likely cause recurrence of material injury

to U.S. SLP producers within a reasonably foreseeable time. See

Commission’s Views, CR List 2, Doc. 78 at 30; Pl.’s Br. at 13, 22.

STANDARD OF REVIEW

The Court reviews the ITC’s determinations in sunset reviews

to ascertain whether they are “unsupported by substantial evidence

on the record, or otherwise not in accordance with law.” 19 U.S.C.

§ 1516a(b)(1)(B)(i); see also 19 U.S.C. § 1516a(a)(2)(B)(iii).

DISCUSSION

Plaintiff challenges both the ITC’s cumulation determination

and its findings of a likely continuation or recurrence of material

injury as not in accordance with law, and unsupported by

substantial evidence. The Court will first address the question of

whether the two determinations were made in accordance with law,

and then discuss the question of substantial evidence.

A. It is Unclear on the Record Whether the ITC’s

 Determinations Were Made in Accordance with Law

Plaintiff challenges both the ITC’s cumulation determination

and its material injury determination as not in accordance with

law, in that the ITC did not make its determinations using the
Court No. 01-00603 Page 6

statutorily required standard of likelihood. See Pl.’s Br. at 8.

Most of the analysis that the ITC is statutorily required to

undertake in a sunset review is governed by a “likely” standard.

For example, in making a determination to cumulate the volume and

effect of imports, the ITC is required to determine whether such

imports are “likely” to compete with each other and with the

domestic product. See 19 U.S.C. § 1675a(a)(7). Likewise, the ITC

must determine whether material injury is “likely” to continue or

recur. See 19 U.S.C. § 1675a(a)(1).

The common meaning of “likely” is “probable,” or, to put it

another way, “more likely than not.” See, e.g., A.G. der

Dillinger Huttenwerke v. United States, slip-op. 02-107, at 18, 18

n.14 (CIT Sept. 5, 2002) (explaining that in a countervailing duty

sunset review, to satisfy a “likely” standard, a thing must be

shown to be “probable,” or “more likely than not”); Usinor

Industeel, S.A. v United States, slip-op. 02-39, at 13-14 (CIT

April 29, 2002) (“Usinor I”). In A.G. der Dillinger Huttenwerke

and Usinor I, the ITC argued for or used a different definition of

likely: one that meant something more akin to “possible” than

“probable.” The Court in those cases refused to countenance the

argument that the meaning of the statutory word “likely” was

ambigous, and upheld the “probable” standard. Id., see also Usinor

Industeel, S.A. v. United States, 26 CIT __, __ 215 F. Supp. 2d

1356, 1357-1358 (2002) (“Usinor II”) (denying interlocutory appeal
Court No. 01-00603 Page 7

3In fact, the ITC avers that throughout the period

contemporaneous with this review, it applied a “probable”

standard, and its advancement of a “possible” standard in the

Usinor cases was due to a fundamental misconception; i.e., that

the Court used the word “probable” to connote a high degree of

certainty, rather than “more likely than not.” See Def.’s Mem.

Opp’n to Pl.’s Mot. for J. on the Agency Rec. at 8-10 (“Def.’s

Br.”). However, because nothing in the ITC’s actual sunset

review determination reflects this understanding, or lack

thereof, the ITC’s argument may be nothing more than post hoc

rationale.

At the same time, the ITC makes the curious and wholly

unpersuasive argument that while the Court may have defined

“likely” as “probable,” it is up to the ITC to define the word

“probable,” and that, moreover, any definition of “probable”

that the ITC adopts should receive Chevron deference. See Def.’s

Br. at 11. Chevron deference applies only to agency

interpretation of an ambiguous statutory term. See Chevron

U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S.

837, 843 (1984). Where a statutory term has a plain meaning, as

it does here, the plain meaning is just that; it requires no

further elucidation on the agency’s part. Furthermore, even were

the ITC’s interpretation of a definition, rather than a statutory

term, somehow susceptible to Chevron deference, the Court notes

that the ITC does not appear to have actually advanced any

meaning for the word “probable” before this Court, other than to

say that “probable” indicates no particular level of certainty.

It does; it requires that something be “more likely so than not.” 

A.G. der Dillinger Huttenwerke v. United States, slip-op. 02-107

at 18 & 18 n.14 (CIT Sept. 5, 2002). 

The Court notes the that the ITC’s argument may be an

indirect way of stating that the ITC still believes that the

statutory term “likely” is ambiguous, and that, therefore, the

ITC’s definition of “likely” is due Chevron deference. However,

as discussed above, the Court has repeatedly found that the term

on the issue of the definition of “likely”), Usinor Industeel, S.A.

v. United States, slip op. 02-152, at 4-6 (CIT Dec. 20, 2002)

(“Usinor III”) (rejecting argument that “likely” means something

between “possible” and “probable”). While the ITC does not appear

to argue before the Court here that “likely” as used in sunset

reviews has any other meaning than “probable,”3 Plaintiff avers
Court No. 01-00603 Page 8

“likely” is not ambiguous; therefore, Chevron deference is not

appropriate in this proceeding.

that the ITC’s determination does not show that the ITC employed a

“more likely than not” standard in evaluating the evidence here. In

addition, Plaintiff claims that, in light of previous cases dealing

with contemporaneous reviews that found that the ITC may have

employed the wrong standard, and contemporaneous statements by the

ITC arguing for or advancing a “possible” standard, the ITC’s

determinations on this sunset review must be remanded as not in

accordance with law. See Pl.’s Br. at 12, 16-19.

Plaintiff is at least partially correct. Although the ITC, in

the Commission’s Views, constantly references the statutory

“likely” standards, nothing in its determination indicates whether

it used “likely” to mean “more likely than not” or something less.

The ITC does not discuss the meaning of “likely,” and the substance

of the Commission’s Views does not reveal the use of a particular

standard. The ITC’s use of an incorrect standard in

contemporaneous reviews, the ITC’s confused arguments regarding the

standard it used in this review, and the failure of the

Commission’s Views to identify the standard used in this review all

render the determination unclear on this issue. It therefore

cannot be sustained as in accordance with law. On remand, the

Court directs the ITC to make clear which standard it used in this

determination, and if it employed a “possible,” rather than “more
Court No. 01-00603 Page 9

likely than not” standard, to reconsider its findings accordingly.

B. Given the Proper Standard of Review, the ITC’s Findings

 on Cumulation are Supported by Substantial 

 Evidence, While ITC’s Findings on Material Injury

 Are Not So Supported

While the ITC’s failure to clearly indicate what it meant by

“likely” requires remand of its decision, regardless of what

definition of “likely” was actually employed, for reasons of

judicial and administrative economy, the Court will also now

consider whether the evidence upon which the ITC based its material

injury determination was substantial enough to support an

affirmative finding under the correct, “probable” standard.

Therefore, the Court will now review whether, given the correct

standard, the ITC had substantial evidence on the record for the

determinations that Plaintiff challenges. Plaintiff challenges two

determinations. First, Plaintiff challenges the ITC’s decision to

cumulate imports from Argentina, Brazil, and Germany as unsupported

by substantial evidence on the record. See Pl.’s Br. at 20.

Second, Plaintiff challenges the ITC’s determination that the

cumulated imports would be such as to create a likelihood of

recurrence of material injury as unsupported by the record

evidence. See Pl.’s Br. at 22. The Court will discuss each

determination in turn.

1. The ITC’s Findings on Cumulation Are Supported by

 Substantial Evidence
Court No. 01-00603 Page 10

The ITC engages in a two-step analysis in deciding whether to

cumulate imports in a sunset review. First, the ITC must determine

whether that the imports from each country would be likely to have

no discernible impact on the U.S. market. See 19 U.S.C. §

1675a(a)(7). The ITC did not find that the imports would likely

have no discernible impact in this case and Plaintiff does not

challenge this issue. See Commission’s Views, CR List. 2, Doc. No.

78 at 13. Second, the ITC must find that the imports it seeks to

cumulate would likely compete with each other and with the domestic

product. See 19 U.S.C. § 1675a(a)(7). It is this latter finding

which Plaintiff challenges. See Pl.’s Br. at 20. 

In deciding whether subject imports would be likely to compete

with each other and the domestic product in the event of

revocation, the ITC traditionally considers four subfactors: (1)

the degree of fungibility between the imports from different

countries and the domestic like product, (2) the existence of

common or similar channels of distribution for imports and the

domestic like product, (3) the presence of sales or offers to sell

in the same geographical markets, and (4) whether the imports are

simultaneously present in the market. See, e.g., Wieland Werke, AG

v. United States, 13 CIT 561, 563, 718 F. Supp. 50, 52 (1989)

(citation omitted). The four subfactors are neither exhaustive nor

exclusive, nor is any single factor determinative. Id. (citation

omitted). In the instant matter, the ITC found that all four
Court No. 01-00603 Page 11

subfactors supported a finding that the imports would compete with

each other and with the domestic like product. See Commission’s

Views, CR List 2, Doc. No. 78 at 13-15. The Court will discuss

each of the four subfactors in turn.

First, the ITC considered the degree of fungibility between

SLP from Argentina, Brazil, Germany, and the U.S. See Commission’s

Views, CR List 2, Doc. No. 78 at 14-15. Degree of fungibility

refers to the degree to which consumers of SLP find foreign and

domestic SLP substitutable for one another. See id.; see also

Corus Staal BV v. United States Int’l Trade Comm’n, CIT Slip. Op.

03-32 at 24 (Mar. 21, 2003). The ITC noted that in the material

injury determination underlying the original antidumping orders on

SLP from the Argentina, Brazil, and Germany, foreign SLP was found

to be a “reasonably good substitute[]” for domestic SLP. See

Commission’s Views, CR List 2, Doc. No. 78 at 14. Moreover,

responses from questionnaires issued for the sunset review revealed

that U.S. importers of SLP found SLP from Argentina, Brazil,

Germany, and the U.S. to be interchangeable. Id. While the

Commission found that most domestic purchasers of SLP require that

SLP comply with standards set by either the American Society for

Testing and Materials or the American Petroleum Insitute, the

Commission noted that no domestic purchasers of SLP indicated that

SLP from Argentina, Brazil, or Germany failed to comply with such

standards. Id. Therefore, the ITC appears to have found that the
Court No. 01-00603 Page 12

4The ITC also points out, in the course of its fungibility

discussion, that price is one of the three most important factors

in SLP purchasing decisions. See Commission’s Views, CR List 2,

Doc. No. 78 at 14. One of the surveys of purchasers conducted by

the ITC indeed shows this result, but a second survey indicates

that there are five factors which surpass price in purchasing

decisions, regarding two of which respondents found domestic SLP

superior to foreign SLP. See Certain Seamless Carbon and Alloy

Steel Standard, Line and Pressure Pipe from Argentina, Brazil,

Germany, and Italy, Staff Report to the Commission on

Investigations Nos. 701-TA-362 and 731-TA-707-710 (Review), CR

List 2, Doc. No. 76 at Page II-13 & Tables II-2, II-7 (May 24,

2001) (“Staff Report”). While the discrepancies between these

two surveys does affect the ITC’s consideration of the likely

price effects of subject imports in the event of revocation, see

discussion infra pp. 38-41, the Court does not believe it

undermines the ITC’s findings on fungibility here. The

substantial record evidence, with which both surveys are

consistent, indicates that foreign SLP would be interchangeable

with domestic SLP for most purchasers.

subfactor of fungibility was satisfied. 

It is unclear whether Plaintiff challenges this subfactor.

See Pl.’s Br. at 20; Pl.’s Reply Br. at 5-6. Plaintiff points to

no record evidence that was ignored by the ITC in making its

fungibility finding, nor to any reasonable alternate view of the

available evidence with which the ITC failed to grapple.4 See id.

Neither does Plaintiff point to evidence which, although not on the

record, should have been placed there, and which would counter the

ITC’s fungibility finding. See id. Therefore, the Court finds

that the ITC’s finding that the subject merchandise was fungible

inter se and with the domestic like product was supported by

substantial record evidence. 

The second subfactor is the existence of common or
Court No. 01-00603 Page 13

5Documents contained on the public record are cited as “PR,”

followed by the document list in which they are contained,

followed by the document number. Documents in the confidential

record are cited as “CR,” followed by the document list in which

they are contained, followed by the document number.

similar channels of distribution. The ITC appears to have

evaluated this subfactor by looking for evidence of whether foreign

SLP and domestic SLP would be likely to be sold to the same

customers. The Commission referred to the finding, in its original

material injury determination underlying the antidumping orders on

SLP from Argentina, Brazil, and Germany, that previous to the

imposition of dumping orders, the subject merchandise operated in

common or similar channels of distribution, in that it was sold to

distributors, rather than directly to end-users. See Commission’s

Views, CR List 2, Doc. No. 78 at 14; see also Certain Seamless

Carbon and Alloy Standard, Line, and Pressure Steel Pipe from

Argentina, Brazil, Germany, and Italy, Investigations Nos. 701-TA362 and 731-TA-707 through 710 (Final), USITC Pub. No. 2910, PR

List 1, Doc. No. 55 at I-23 (July 1995) (“Original

Determination”).5 Furthermore, the ITC indicated that the

overwhelming majority of both domestic producers’ sales and

importers’ sales during the sunset review period were to

distributors, rather than to end-users. See Commission’s Views, CR

List 2, Doc. No. 78 at 15, 15 n.81. The ITC also noted that

“[t]here is nothing in the record of [the sunset review] indicating

that a significant overlap in the channels of distribution among
Court No. 01-00603 Page 14

subject imports and the domestic like product would not be likely

upon revocation of the antidumping duty orders.” See Commission’s

Views, CR List 2, Doc. No. 78 at 15 (emphasis added).

Siderca makes two challenges to the ITC’s findings on the

common channels of distribution subfactor. First, it alleges that

it provided proof to the ITC that its imports would not compete in

common or similar channels of distribution with domestic SLP.

Pl.’s Br. at 20-21. Second, it challenges the manner in which the

ITC framed its findings, claiming the ITC’s particular choice of

words is indicative of a lack of substantive evidence to support

its findings. Pl.’s Br. at 13, 20. The Court will consider each

argument in turn. 

First, Siderca alleges that it provided proof to the ITC that

its imports would not compete in common or similar channels with

domestic SLP. Specifically, during the sunset review, Siderca

stated that its focus would be on long-term contracts with endusers, rather than sales to distributors. See Commission’s Views,

CR List 2, Doc. No. 78 at 15 n.81. As proof of its end-user

focus, Siderca submitted to ITC a chart showing that end-user sales

had accounted for, in the year 2000, a majority of its sales of all

steel goods production, including SLP. See Long Term Agreements,

Ex. 3 to Resps. to Comm’r & Staff Post-Hr’g Questions, Attach. to

Post Hr’g Br. of Siderca SAIC from Argentina, Attach. to Letter

from David P. Houlihan et. al. to the Hon. Donna R. Koehnke, Sec’y,
Court No. 01-00603 Page 15

U.S. Int’l Trade Comm’n, Re: Certain Seamless Carbon and Alloy

Steel Standard, Line, and Pressure Pipe from Argentina, Brazil,

Germany, and Italy Invs. Nos. 701-TA-362 and 731-TA-707-

710(Reviews), CR List 2, Doc. No. 49 (May 10, 2001). However, the

ITC found that while the graph showed that the majority of

Siderca’s production and sales were bound to long-term, end-user

contracts, the rest, a sizable minority, were not so bound. See

Commission’s Views, CR List 2, Doc. No. 78 at 15 n.81. Therefore,

while Siderca may “prefer” the long-term, end-user market, a

sizable amount of its SLP does not trade in the long-term, end-user

market. Id.

Second, Siderca challenges the ITC’s statement that “[t]here

is nothing in the record of [the sunset review] indicating that a

significant overlap in the channels of distribution among subject

imports and the domestic like product would not be likely upon

revocation of the antidumping duty orders.” Commission’s Views, CR

List 2, Doc. No. 78 at 15 (emphasis added); see also Pl.’s Br. at

13, 20. Siderca challenges the statement on a logical, rather than

an evidentiary or substantive basis, pointing out that there being

no evidence on the record to refute a fact is not the same thing as

there being evidence on the record to support it. Id. While true

as a logical statement, the argument is inapposite here. In

stating that there was no record evidence to show that subject

imports would not compete with each other and the domestic like
Court No. 01-00603 Page 16

6Siderca has not alleged that it was dissuaded from putting

evidence on the record during the investigation; moreover, it

refused to provide certain information, such as its business

plan, to the ITC. See Siderca’s Response to Foreign

Producers’/Exporters’ Questionnaire: Certain Seamless Carbon and

Alloy Steel Standard, Line, and Pressure Pipe from Argentina,

Attach. 2 to Letter from David P. Houlihan & Lyle B. Vander

Schaaf, White & Case LLP, to Christopher Cassie, U.S. Int’l Trade

Comm’n, Office of Investigations, Re: Certain Seamless Carbon and

Alloy Steel Standard Line, and Pressure Pipe from Argentina et

al., Inv. Nos. 701-TA-362 & 731-Ta-707-710 (Review), CR List 2,

Doc. No. 29 at Question I-4 (Mar. 19, 2001). The Court notes

that to the extent Siderca was actually in possession of

persuasive evidence and refused to provide it or did not take the

opportunity to place it on the record, it must bear the burden of

its behavior or inattention.

product, the ITC does not appear to have been covering up an

absence of record evidence to support a finding that subject

imports would compete with each other and with the domestic like

product. While there was very little evidence on the record

regarding common channels of distribution, what evidence there was

indicated that the distributor market is the predominate method by

which SLP is bought and sold in the United States. This evidence

supported the ITC’s finding that Argentine, Brazilian, and German

SLP would compete in the same distributor market as domestic SLP.

Moreover, the ITC explained why it did not find Siderca’s end-user

argument persuasive, and Siderca has pointed to no other evidence

that could serve to persuasively rebut the ITC’s finding that a

sizable amount of its SLP sales were not to long-term end-users,

and therefore must have moved in other markets, such as distributor

markets.6 Given this context, the ITC’s statement that there was
Court No. 01-00603 Page 17

7The Court recognizes that Plaintiff’s underlying argument

is that evidence from the original reviews alone cannot

constitute “substantial” evidence justifying cumulation in this

sunset review. See Pl.’s Br. at 20-21. Almost no SLP was

imported to the United States from the subject producers during

the five years preceding the sunset review; hence, there is no

evidence relating to the sunset review period on most of the

cumulation subfactors. See Staff Report, CR List 2, Doc. No. 76

at Tables IV-3, IV-5, and IV-7. According to Plaintiff’s

argument, while the findings underpinning the original orders may

have some evidentiary value, they do not rise to the level of

substantial evidence. Plaintiff’s argument, however, is overly

broad. What constitutes substantial evidence, i.e., “such

relevant evidence as a reasonable mind might accept as adequate

to support a conclusion,” Consol. Edison Co. v. NLRB, 305 U.S.

197, 229 (1938) (citations omitted), depends, of course, on the

conclusion being supported. Given that the conclusion to be

supported here is that subject producers will avail themselves of

the distributor market should they sell in the U.S., evidence

that the distributor method of buying and selling SLP is the only

one current with importers in the United States, represents the

majority of sales of domestic SLP producers, and that subject

producers used this method when they previously sold SLP to the

U.S. market, appears to be “such relevant evidence as a

reasonable mind might accept as adequate to support a

conclusion.” 

no record evidence to support a finding that subject imports would

not compete with each other is simply a true, factual statement.

There was no such record evidence. There was, however, evidence

indicating that they would compete.7 

Therefore, because the ITC placed on the record and discussed

in the Commission’s Views evidence which supported a finding that

foreign SLP would have common or similar channels of distribution,

and there was no evidence on the record to suggest otherwise, the

Court finds that the ITC’s finding that Argentine, Brazilian, and

German SLP would have common or similar channels of distribution
Court No. 01-00603 Page 18

8Exports of SLP to the United States from Brazil and

Argentina were at [***] during the period of review; exports of

SLP to the United States from Germany ranged between a low of

[less than ***] short tons in 1999 and a high of [more than ***]

short tons in 1998. See Staff Report, CR List 2, Doc. No. 76 at

Tables IV-3, IV-5, and IV-7. 

with domestic SLP is supported by substantial evidence.

The third subfactor in the cumulation analysis is the likely

presence of sales or offers to sell in the same geographical

markets. In finding that foreign SLP was likely to compete in the

same geographical areas as domestic SLP, the ITC relied on the

findings in its original material injury determination that imports

had competed directly, and nationwide, with domestic SLP before the

orders were issued. See Commission’s Views, CR List 2, Doc. No. 78

at 15. The only other record evidence relevant to the topic was the

indication by both domestic producers and importers of SLP that,

during the sunset review period, they served the entire continental

United States. Id. at 15 n.84. 

Siderca faults the ITC for relying so heavily on its original

determination in making the findings here. See Pl.’s Br at 20-21.

Siderca points out that it did not import subject merchandise to

the United States during the period covered by the sunset review.8

Siderca appears to infer from this that there cannot be substantial

evidence to support a finding that subject merchandise would likely

compete in the same geographic areas as domestic SLP or to support

a finding that subject merchandise would be simultaneously present
Court No. 01-00603 Page 19

9While the Original Determination did find that there had

been competition for at least 27 quarters, this finding appears

to be based on a misreading of the staff report accompanying the

Original Determination. The Original Determination cites to page

115 of the accompanying staff report for the proposition that

there had been competition for at least 27 quarters. See

Original Determination at I-23, 23 n.128. However, the data on

that page instead shows that there had been at least 27

individual price comparisons over four years. Staff Report (INVS-097) Original (Final) at I-115 (July 1995) (“Original Staff

Report”). Although the Original Determination cited to this

in the market with domestic SLP. 

Siderca’s challenge to the ITC’s handling of this subfactor is

unpersuasive. While it is true that there was virtually no

importation of SLP from the subject countries during the period

covered by the sunset review, given that U.S. SLP producers sell

nationwide, even were an importer of SLP only to focus on a small

area of the country, the importer would necessarily be competing in

the same geographic area as the domestic SLP producers. Therefore,

the ITC’s finding that foreign SLP was likely to compete

geographically with domestic SLP is supported by substantial

evidence.

The fourth subfactor that ITC traditionally considers with

regard to cumulation is simultaneous presence in the market. This

factor appears to relate to whether goods are in the market at the

same time. The Original Determination found that there had been

direct competition between subject and domestic SLP for at least 27

straight financial quarters. See Original Determination at I-23,

23 n.128;9 see also Original Staff Report at I-115.10 Moreover, the
Court No. 01-00603 Page 20

incorrectly, the substantive import of its finding remains true:

both domestic and foreign SLP had competed simultaneously in the

U.S. market during the original period of review.

10The Original Staff Report was not listed as part of the

certified administrative record in this case. Nevertheless, it

is cited to by the Original Determination, and can therefore

fairly be taken as incorporated by reference. A copy of the

confidential version of the Original Staff Report was provided to

the Court by the ITC, and is now on file with the Court. 

However, because it was not listed as part of the certified

administrative record, it does not have a list or document

number.

Court has located no evidence on the record, or any argument in the

briefs, suggesting that the SLP market is a seasonal market, such

that foreign SLP would be available at set times when domestic SLP

was not. The proposition to be supported is that steel products

are not seasonal goods such that domestic and foreign producers

will sell the goods at mutually exclusive time periods. It appears

to the Court that the original determination provides such evidence

as would enable a reasonable mind to find that the proposition is

supported.

In conclusion, the Court finds that the ITC’s determinations

on all four subfactors are supported by substantial evidence on the

record. The ITC amassed evidence showing that the foreign and

domestic like products were considered good substitutes by

consumers. The ITC demonstrated that there is a predominant

channel of distribution for SLP in the United States, and

discussed, if briefly, Plaintiff’s substantive objections to its

analysis of this issue. The ITC amassed evidence which shows
Court No. 01-00603 Page 21

conclusively that foreign imports would compete in the same

geographic markets as domestic SLP, and finally, the evidence on

likely simultaneous presence, while scanty, is sufficient to enable

a reasonable mind to find the proposition supported. Therefore,

the Court finds that the ITC’s cumulation determination was

supported by substantial evidence and thus, cumulation of the

volume and effect of Argentine, Brazilian, and German imports was

proper.

2. The ITC’s Findings on Material Injury Are Not 

 Supported by Law or Substantial Evidence

Having found that the ITC’s cumulation decision is supported

by substantial evidence on the record, the Court will discuss the

ITC’s finding that revocation of the antidumping orders is likely

to lead to a continuation or recurrence of material injury to the

domestic SLP industry within a reasonably foreseeable period of

time. To make an affirmative finding that material injury is

likely to recur, the ITC is statutorily required to evaluate three

factors and determine that these factors support a finding that

revocation would lead to material injury in a “reasonably

foreseeable” period of time. See 19 U.S.C. § 1675a(a)(1). These

three factors are (1) the likely volume of subject imports, (2) the

likely price effects of subject imports, and (3) the likely impact

of subject imports. Id. Plaintiff challenges the ITC’s findings

on all three factors; the Court discusses each factor in turn. See
Court No. 01-00603 Page 22

11Title 19 U.S.C. § 1675a(a)(2)-(4) describes the three main

factors that the ITC is to consider (volume, price, and impact),

as well as the each factor’s corresponding subfactors: 

(2) Volume

 In evaluating the likely volume of imports of the subject

merchandise if the order is revoked or the suspended

investigation is terminated, the Commission shall consider

whether the likely volume of imports of the subject merchandise

would be significant if the order is revoked or the suspended

investigation is terminated, either in absolute terms or relative

to production or consumption in the United States. In so doing,

the Commission shall consider all relevant economic factors,

including—

(A) any likely increase in production capacity or existing

unused production capacity in the exporting country,

(B) existing inventories of the subject merchandise, or

likely increases in inventories,

(C) the existence of barriers to the importation of such

merchandise into countries other than the United States, and

(D) the potential for product-shifting if production

facilities in the foreign country, which can be used to

produce the subject merchandise, are currently being used to

produce other products.

(3) Price

 In evaluating the likely price effects of imports of the

subject merchandise if the order is revoked or the suspended

investigation is terminated, the Commission shall consider

whether—

(A) there is likely to be significant price underselling by

imports of the subject merchandise as compared to domestic

Pl.’s Br. at 22, 29, 31.

i. ITC’s Findings on the Likely Volume of Imports

 Is Not in Accordance with Law and is Not 

 Supported By Substantial Evidence.

The first factor concerns the likely volume of subject imports

in the event of revocation. See 19 U.S.C. § 1675a(a)(2)(A)-(D).11
Court No. 01-00603 Page 23

like products, and

(B) imports of the subject merchandise are likely to enter

the United States at prices that otherwise would have a

significant depressing or suppressing effect on the price of

domestic like products.

(4) Impact on the industry

 In evaluating the likely impact of imports of the subject

merchandise on the industry if the order is revoked or the

suspended investigation is terminated, the Commission shall

consider all relevant economic factors which are likely to have a

bearing on the state of the industry in the United States,

including, but not limited to—

(A) likely declines in output, sales, market share, profits,

productivity, return on investments, and utilization of

capacity,

(B) likely negative effects on cash flow, inventories,

employment, wages, growth, ability to raise capital, and

investment, and

(C) likely negative effects on the existing development and

production efforts of the industry, including efforts to

develop derivative or more advanced version of the domestic

like product.

The Commission shall evaluate all relevant economic factors

described in this paragraph within the context of the business

cycle and the conditions of competition that are distinctive to

the affected industry.

19 U.S.C. § 1675a(a)(2)-(4).

The ITC is statutorily mandated to consider four subfactors in

evaluating the likely volume of imports. These four subfactors,

which are non-exclusive, include: (1) any likely increase in the

production capacity or existing unused production capacity in the

exporting country; (2) existing inventories of the subject

merchandise; or likely increases in inventories, (3) the existence

of barriers to the importation of such merchandise into countries
Court No. 01-00603 Page 24

other than the United States; and (4) the potential for productshifting if production facilities in the foreign country, which can

be used to produce the subject merchandise, are currently being

used to produce other products. See 19 U.S.C. § 1675a(a)(2). The

ITC appears to have considered two additional subfactors as well,

for a total of six subfactors: (5) the extent to which the

exporting countries’ SLP production was export-driven; and (6) the

international business affiliations of the manufacturers in the

exporting countries. See Commission’s Views, CR List 2, Doc. No.

78 at 25-27. The Court will discuss the ITC’s treatment of each

subfactor in turn, and then discuss whether, together, they support

a finding that the likely volume of subject imports upon revocation

support a further finding that material injury was likely to

continue or recur.

The first subfactor involves the effects of any likely

increase in the exporting countries’ production capacity or

existing unused production capacity in the exporting country. See

19 U.S.C. § 1675a(a)(2)(A). Subject manufacturers’ overall

capacity to produce subject merchandise declined during the period

of review, but the ITC found that they maintained some excess

capacity. See Staff Report, CR List 2, Doc. No. 76 at Tables IV-3,

IV-5, and IV-7; Commission’s Views, CR List 2, Doc. No. 78 at 24,

24 n.147.

 The second subfactor involves existing inventories of the
Court No. 01-00603 Page 25

subject merchandise, or likely increases in inventories. See 19

U.S.C. § 1675a(a)(2)(B). The ITC found that while Brazil and

Germany did not maintain inventories of the subject merchandise

during the POR, Argentina’s end-of-period inventories for 2000

totaled [almost ***] short tons, a figure that was roughly average

for Argentina during each year of the period of review, and

amounted to a fairly small percentage of Argentine SLP production

for 2000. See Commission’s Views, CR List 2, Doc. No. 78 at 26

n.156; Staff Report at Tables IV-3, IV-5, and IV-7. The ITC also

found that while there were no reported U.S. end-of-year

inventories of Brazilian or German SLP during the period of review,

U.S. importers did hold a very small stock of Argentine SLP in

inventory at the end of the years 1997-2000. See Commission’s

Views, CR List 2, Doc. No. 78 at 26 n.156; Staff Report, CR. List

2, Doc. No. 76 at Table IV-2.

The third subfactor is the existence of barriers to the

importation of such merchandise into countries other than the

United States. See 19 U.S.C. § 1675a(a)(2)(C). The ITC found that

the exporting countries did not face antidumping orders from

countries other than the U.S., but Brazilian and German SLP faced

high tariffs or non-tariff barriers in a number of other countries.

See Commission’s Views, CR List 2, Doc. No. 78 at 25 n.153.

The fourth subfactor is the potential for product-shifting if

production facilities in the foreign country, which can be used to
Court No. 01-00603 Page 26

12Siderca challenges ITC’s determination on product-shifting

as not hewing to a likelihood standard. See Pl.’s Br. at 13. 

The ITC replies that 19 U.S.C. § 1675a(a)(2)(A)(D), which

describes the product-shifting subfactor, requires ITC to

evaluate the “potential” for product-shifting rather than the

“likelihood” thereof. See Def.’s Br. at 20. Rather than simply

misstating the statutory standard, Siderca appears to be arguing

that, having no persuasive evidence on the other three statutory

factors, the ITC relied solely on its findings on “potential”

product-shifting to conclude that the likely volume of imports

was sufficient to support of a finding of likely recurrence of

material injury. See Pl.’s Br at 13. While the ITC is

statutorily required to evaluate certain factors, it does not

necessarily follow that even if it found that all were satisfied,

its volume determination would be supported by substantial

evidence. That depends on the facts of the particular

determination. However, as the Court finds that the ITC has not

amassed sufficient evidence to support a finding that there is a

meaningful potential for product-shifting, see infra pp. 30-31,

it need not reach this issue.

13The Court notes that neither the Commission’s Views nor

the Staff Report indicate where in the record SLP producers

reported their ability to shift production; neither do the

Commission’s Views or the Staff Report indicate whether producers

were reporting their ability to physically turn their plants over

to SLP production from production of other goods, the economic

feasibility of doing so, or both. See Commission’s Views, CR

List 2, Doc. No. 78 at 24; Staff Report, CR List 2, Doc. No. 76

at Tables IV-4, IV-6, IV-8, Pages IV-4, IV-8, IV-12, and IV-15. 

For further discussion of this issue and its effects on this

produce the subject merchandise, are currently being used to

produce other products.12 See 19 U.S.C. § 1675a(a)(2)(D). The ITC

notes that the exporting countries can produce SLP on the same

machines that they employed, during the POR, to make other products

such as mechanical and boiler tubing and oil country tubular goods

(“OCTG”). See Commission’s Views, CR List 2, Doc. No. 78 at 24.

The ITC noted that SLP producers reported that they can shift

production between subject merchandise and other products13 and that
Court No. 01-00603 Page 27

instant case, see infra pp. 30-31 and 31 n.16. 

14Siderca again argues that it would be unlikely to shift

sales to the U.S. market because of its commitments to long-term

end-users outside the United States. Pl.’s Br. at 25-26. Again,

the ITC replies that a significant minority of its SLP production

does not appear to be bound to any long-term contracts. Def.’s

Br. at 27. Given the amount of SLP that Argentina produces per

year, were it all redirected toward the U.S. market, it would

constitute a significant amount. See Staff Report, CR List 2,

Doc. No. 76 at Table IV-3. Moreover, Siderca provides no

evidence to support its claim that it would not switch sales of

SLP to the U.S market other than the aforementioned chart showing

that the majority of its production of all steel goods, including

SLP, is already contract-bound. See Long Term Agreements, Ex. 3

to Responses to Commissioner & Staff Post-Hearing Questions,

Attach. to Post Hearing Brief of Siderca SAIC from Argentina,

Attach. to Letter from David P. Houlihan et. al. to the Hon.

Donna R. Koehnke, Sec’y, U.S. Int’l Trade Comm’n, Re: Certain

Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe

from Argentina, Brazil, Germany, and Italy Invs. Nos. 701-TA-362

and 731-TA-707-710(Reviews), CR List 2, Doc. No. 49 (May 10,

2001). 

Siderca moreover argues that it would not be able to shift

production away from other goods into SLP, so as to have more SLP

to sell to the U.S. market, because its current production of

other steel goods is also heavily contract-bound. See Pl.’s Br.

their overall capacity to produce all products is quite high. Id.;

see also Staff Report, CR List 2, Doc. No. 76 at Tables IV-4, IV-6,

IV-8, and Pages IV-4, IV-8, IV-12, and IV-15 to IV-16. The ITC

also noted that the record indicates that SLP prices are generally

higher in the U.S. than elsewhere. See Commission’s Views, CR List

2, Doc. No. 78 at 24-25; Staff Report, CR List 2, Doc. No. 76 at

Pages V-17 to V-18. The ITC states that Argentina would have a

special incentive for switching production to SLP, as there is a

U.S. antidumping order in place on Argentine OCTG. See Commission’s

Views, CR List 2, Doc. No. 78 at 25 n.151.14
Court No. 01-00603 Page 28

at 26-27. The ITC again points toward Siderca’s Long Term

Agreements Chart, which covers all of Siderca’s steel goods

production. That chart, as mentioned before, shows that a

sizable minority of Siderca’s steel goods production is not

contract bound.

The fifth subfactor that the ITC considered is that of the

export-driven nature of the exporting countries. See Commission’s

Views, CR List 2, Doc. No. 78 at 26. The ITC found that the

reviewed countries produced heavily for the export market, with the

significant majority of Argentina and Germany’s production going

abroad, and roughly a third to a half of Brazil’s production going

abroad. See Commission’s Views, CR List 2, Doc. No. 78 at 26

n.155; see also Staff Report, CR List 2, Doc. No. 76 at Tables IV3, IV-5, and IV-7.

The sixth subfactor considered was the transnational corporate

affiliations of the manufacturers in the exporting countries. See

Commission’s Views, CR List 2, Doc. No. 78 at 26. The ITC found

that the corporate affiliations of many of the subject country

producers would provide a ready network for marketing, sales, and

distribution, enhancing the producers’ ability to resume

exportation to the United States. Id.

The ITC is not particularly clear as to how it combines the

individual subfactors into a coherent whole, but, taken together,

it appears that the ITC rests its finding regarding the likely

volume on the following considerations: (1) the producers’ overall

capacity to produce all steel goods, combined with their physical
Court No. 01-00603 Page 29

15Moreover, as the Supreme Court noted in SEC v. Chenery

Corp., an agency’s failure to articulate with precision the basis

of its determination renders the determination unsuitable for

substantial evidence review:

If the administrative action is to be tested by the

basis upon which it purports to rest, that basis must

be set forth with such clarity as to be understandable.

It will not do for a court to be compelled to guess at

the theory underlying the agency's action; nor can a

court be expected to chisel that which must be precise

from what the agency has left vague and indecisive. 

SEC v. Chenery Corp., 332 U.S. 194, 196-97 (1947).

ability to product-shift; (2) the export-driven nature of the

subject producers’ SLP production; and (3) their international

corporate contacts. The ITC appears to hold that the combination

of its findings on these three factors make it likely that upon

revocation of the antidumping order, there would be an influx of

SLP imports from the subject countries of sufficient volume to

cause a recurrence of material injury. See Commission’s Views, CR

List 2, Doc. No. 78 at 26. While this analysis may be

unobjectionable as far as it goes, to be supported by substantial

evidence, there must be “a rational connection between the facts

found and the choice made.” Burlington Truck Lines Co. v. United

States, 371 U.S. 156, 168 (1962).15 The Court cannot conclude that

the ITC’s finding of a likely volume of imports sufficient to

support a finding of material injury are justified, for two

reasons. First, while the ITC has shown that the subject producers

have a significant overall capacity to produce steel goods and are
Court No. 01-00603 Page 30

export-driven, the ITC has not made clear how it concludes that

there is a meaningful potential for product-shifting. Second, the

ITC has not explained how the subject producers’ international

corporate contacts support its findings.

First, the ITC’s analysis of the potential for productshifting is not in accordance with law. The ITC rests its finding

of a potential for product-shifting solely on a finding that such

shifting is physically possible. The ITC never inquires into

whether such a shift makes economic sense for the subject-country

producers; i.e, whether the prices for SLP in the U.S. would

economically justify a product-shift away from mechanical and

boiler tubing and OCTG. However, the language of 19 U.S.C. §

1675a(a)(2)(D) indicates that something more than physical ability

to product-shift must be found in order to satisfy the productshifting subfactor.

Specifically, the statute directs the ITC to consider the

potential for product-shifting “if production facilities in the

foreign country, which can be used to produce the subject

merchandise, are currently being used to produce other products.”

19 U.S.C. § 1675a(a)(2)(D). Under the statute, the physical

ability to produce subject merchandise using facilities now

otherwise occupied is the necessary condition for considering the

potential for product shifting. Such physical ability does not, on

its own, indicate that the subfactor is satisfied. To hold
Court No. 01-00603 Page 31

16Given that the subject country producers are profit-making

entities, their potential for doing anything rests inherently on

their ability to afford it, e.g., because it makes them a profit,

or because a short-term loss is worth the risk in order to profit

later. While the ITC has provided evidence to support the notion

that prices for SLP are generally higher in the U.S. than

elsewhere, this alone does not answer the question of whether

product-shifting is at all economically feasible, and hence, a

potential option for the subject country producers. See

Commission’s Views, CR List 2, Doc. No. 78 at 24; Staff Report,

CR List 2, Doc. No. 76 at Pages V-17 to V-18.

Indeed, ITC does not appear totally unaware that the

economic feasibility of product-shifting is relevant to the

product-shifting subfactor. In its questionnaire to foreign

producers, ITC asked that producers indicate whether they could

product-shift “in response to a relative price change” for SLP

vis-a-vis other products, using the same equipment or labor, and

furthermore questioned producers concerning the cost of switching

and what sort of price change would induce product-switching, a

question which naturally might implicate producers relative

profit margins for other goods. However, almost all the foreign

producers indicated that they could not switch between products

because it was not economically feasible. See Siderca S.A.I.C.’s

Response to Foreign Producers’/Exporters’ Questionnaire: Certain

Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe

from Argentina, Attach. 2 to Letter from David P. Houlihan & Lyle

B. Vander Schaaf, White & Case LLP, to Christopher Cassie, U.S.

Int’l Trade Comm’n, Office of Investigations, Re: Certain

Seamless Carbon and Alloy Steel Standard Line, and Pressure Pipe

otherwise would render the first clause of 19 U.S.C. §

1675a(a)(2)(D) superfluous. If the mere physical ability to

product-shift was sufficient to show the “potential” to productshift, then there would be no reason to direct the ITC to consider

that potential above and beyond a finding of the physical ability

to product-shift. Therefore, the Court must conclude that Congress

intended 19 U.S.C. § 1675a(a)(2)(D) to be satisfied only when, in

addition to the physical ability to product-shift, product-shifting

was otherwise a viable option.16 
Court No. 01-00603 Page 32

from Argentina et al., Inv. Nos. 701-TA-362 & 731-Ta-707-710

(Review), CR List 2, Doc. No. 79 at Question II-9 (Mar. 19,

2001); Dalmine SpA’s Response to Foreign Producers’/Exporters’

Questionnaire: Certain Seamless Carbon and Alloy Steel Standard,

Line, and Pressure Pipe from Italy, Attach. 1 to Letter from

David P. Houlihan & Lyle B. Vander Schaaf, White & Case LLP, to

Christopher Cassie, U.S. Int’l Trade Comm’n, Office of

Investigations, Re: Certain Seamless Carbon and Alloy Steel

Standard Line, and Pressure Pipe from Argentina et al., Inv. Nos.

701-TA-362 & 731-Ta-707-710 (Review), CR List 2, Doc. No. 79 at

Question II-9 (Mar. 19, 2001); Vallourec & Mannesman Tubes SA’s

Response to Foreign Producers’/Exporters’ Questionnaire: Certain

Seamless Carbon and Alloy Steel Standard, Line, and Pressure Pipe

from Germany, CR List 2, Doc. No. 82 at Question II-9 (Mar. 19,

2001) (Vallourec & Mannesman Tubes SA, although headquartered in

France, produces SLP in Germany and Brazil, and exports SLP from

those facilities). Only one foreign producer, Pietra SpA,

indicated that it could switch; however, Pietra SpA indicated

only that it could use the same equipment it currently uses to

produce goods such as mechanical tubing to produce SLP, without

addressing economic factors. See Pietra SpA’s Response to

Foreign Producers’/Exporters’ Questionnaire: Certain Seamless

Carbon and Alloy Steel Standard, Line, and Pressure Pipe from

Italy, CR List 2, Doc. No. 80 at Question II-9 (Mar. 13, 2001).

17Of course, product-shifting may be irrelevant if the SLP

currently produced by the subject country manufacturers could be

The ITC does not indicate exactly how much weight it gives the

product-shifting subfactor, but under the Court’s reading of the

Commission’s Views, it appears to be substantial. Given that the

evidence supporting the other three statutory subfactors is minimal

at best, it appears to the Court that if the ITC’s volume finding

is to be supported by substantial evidence and in accordance with

law, the ITC must indicate something beyond the mere physical

possibility of product-shifting, and show that product-shifting is

potentially a rational economic option in light of revocation of

the orders.17, 18
Court No. 01-00603 Page 33

re-directed to the U.S. market in sufficient quantity to affect

the U.S. market, but the Commission’s Views do not rely on this

claim. While the ITC notes that the volume of SLP currently

produced by the subject countries amounts to more than current

U.S. demand, the ITC appears to make no argument regarding the

likely volume of the subject countries’ exports to the United

States in the absence of product-shifting. See Commission’s

Views, CR List 2, Doc. No. 78 at 24.

18While the ITC states that Argentina would have a special

incentive for switching production over to SLP, as there is a

U.S. antidumping order in place on Argentine OCTG, it fails to

indicate what amount of OCTG would likely be supplanted by SLP

and whether this would be significant. See Commission’s Views, CR

List 2, Doc. No. 78 at 25 n.151.

Second, the ITC appears to give weight to the transnational

corporate affiliations of the subject country producers. See

Commission’s Views, CR List 2, Doc. No. 78 at 26-27. Again, the

ITC does not indicate how much weight it ascribes to this factor;

it is therefore difficult for the Court to evaluate its importance

in relation to the substantial evidence standard. Be that as it

may, the ITC describes how several of the subject country producers

belong to large conglomerates. Id. at 26 n.158. The ITC

furthermore argues that cross-ownership among foreign subject

producers “appears to be enhancing their ability to supply seamless

pipe customers with operations in the United States and abroad

through flexible supply arrangements, including global contracts.”

Id. at 26-27. In support of this, the ITC cites to the Staff

Report’s discussion of pricing practices in the SLP market. See

id. at 27 n.160; Staff Report, CR List 2, Doc. No. 76 at Page V-7.
Court No. 01-00603 Page 34

19The ITC does state that one German subject producer is

part of a conglomeration that currently ships SLP to the United

States from a country not subject to an antidumping order. See

Commission’s Views, CR List 2, Doc. No. 78 at 26 n.158. 

Conceivably, the parent corporation could use the distribution

network it has for importing SLP from the non-subject country to

help its subject country subsidiary, were the order revoked, but

the ITC does not make this argument, preferring to allow the mere

suspicion to masquerade as evidence.

The Staff Report states that respondents gave mixed responses on

the issue of whether there is “an increasing trend on the part of

some end users toward using global contracts.” Staff Report, CR

List 2, Doc. No. 76 at Page V-7. The ITC does not make it clear

how it leaps from respondents’ mixed views of a possible

contracting trend to the conclusion that the subject country

producers have contacts that will accelerate their marketing and

distribution into the United States.19 

Therefore, the Court remands the ITC’s volume finding for

further investigation and discussion of the potential for productshifting, and for clarification on how transnational corporate

affiliations affect the volume calculus.

ii. ITC’s Findings on the Likely Price Effects of 

 Imports Are Not Supported By Substantial

Evidence

Having discussed the ITC’s treatment of the likely volume

factor in its material injury determination, the Court will

consider the second factor: likely price effects of subject imports

in the event of revocation. The ITC is statutorily required to
Court No. 01-00603 Page 35

20Plaintiff does challenge the ITC’s findings as to the

second subfactor, whether the subject imports are likely to enter

the United States at prices that would have a significant

depressing or suppressing effect on the price of domestic like

products. See 19 U.S.C. § 1675a(a)(3). However, while Plaintiff

does point out an underlying inconsistency in ITC’s statement of

its findings, the Court is not convinced that any particularly

substantial error on the ITC’s part has occurred. 

In its discussion of the second subfactor, the ITC notes

that the original investigation found significant “price

depressing and suppressing effects.” See Commission’s Views, CR

List 2, Doc. No. 78 at 27. ITC then notes that given the likely

volume of subject imports, the lower prices for foreign SLP

reported by purchasers, and a record of consistent underselling

in the original investigation, the revocation of the antidumping

orders will lead to exports with likely significant price

depressing and suppressing effects. See id. at 28.

First, to the extent that this finding is based on the ITC’s

discredited determinations regarding volume and the importance of

price in the SLP market, it must be remanded for reevaluation in

light of the remand determinations on those issues. Second, the

Court finds that to the extent that it is ambiguous to say that

both price suppression and depression will occur, the finding

will be remanded for clarification.

Price depression occurs when firms lower the price of goods

in order to maintain market share in the face of low-cost

competition. Price suppression occurs when a firm maintains its

consider two subfactors in evaluating the likely price effects.

These are (1) whether there is likely to be significant

underselling by the subject imports as compared with the domestic

like product and (2) whether the subject imports are likely to

enter the United States at prices that would have a significant

depressing or suppressing effect on the price of domestic like

products. See 19 U.S.C. § 1675a(a)(3). The main controversy on

these facts concerns whether or not the ITC’s findings with regard

to the first subfactor are such as to support a finding of likely

continuation or recurrence of material injury.20
Court No. 01-00603 Page 36

current price rather than increasing it, in response to low-cost

competition. A single firm cannot, of course, lower prices and

maintain prices simultaneously. However, because firms may react

differently to low-cost competition, there may be some firms that

respond with depressed prices and others that respond with

suppressed prices. This appears to have happened in the original

investigation: some firms alleged lost sales, others lost

revenues. See Original Determination, PR List 1, Doc. No. 55 at

I-29, Original Staff Report at I-120 to I-129. Changes in market

conditions also meant that the industry as a whole varied its

response from suppression to depression and back. See Original

Determination, PR List 1, Doc. No. 55 at I-29. With regard to

the original investigation, it therefore would make sense to

describe the subject imports as having “price depressing and

suppressing effects.” See Commission’s Views, CR List 2, Doc.

No. 78 at 27. 

However, in now finding that both price depression and

suppression are likely to result from revocation of the order,

the ITC does not make clear whether it contemplates that in the

event of revocation, some firms will lower prices, and some will

maintain them, or whether market conditions will favor one

scenario, and then the other. See Commission’s Views, CR List 2,

Doc No. 78 at 28. Without this necessary context, it appears

that the ITC is stating that prices will simultaneously go down

and stay the same across the entire industry. The Court

therefore remands this finding for review in light of the remand

findings on volume, and, inasmuch as the conclusions are the

same, clarification as to how price suppression and depression

will occur.

The first subfactor is whether there is likely to be

significant underselling by the subject imports as compared with

the domestic like product. See 19 U.S.C. § 1675a(a)(3)(A). The

ITC first notes that the original investigations found that price

was an important factor in purchasing decisions, and that subject

imports significantly undersold the domestic like product during

the period of investigation. See Commission’s Views, CR List 2,

Doc. No. 78 at 27. The ITC also finds that a majority of producers

and importers reported that differences other than price between
Court No. 01-00603 Page 37

21The Court notes however, that there was disagreement as to

whether price itself was a significant factor. See Staff Report,

CR List 2, Doc. No. 76 at Page II-17.

22This appears to be somewhat of a misstatement on the ITC’s

part, although it is partially clarified by a footnote. See

Commission’s Views, CR List 2, Doc. No. 78 at 28, 28 n.170.

Although twenty domestic purchasers of SLP responded to the ITC’s

questionnaires (see Responses to Purchasers’ Questionnaire,

Certain Seamless Carbon and Alloy Steel Standard, Line, and

Pressure Pipe from Argentina, Brazil, Germany, and Italy, CR List

2, Doc. Nos. 111, 113-118, 121-132 (including 127A) (Doc. Nos.

112 and 118 represent non-responses)), fewer than half appear to

have answered any of ITC’s specific questions regarding price

comparison between domestic SLP and SLP from Argentina, Brazil,

Germany, and Italy. See Responses to Purchasers’ Questionnaire,

Certain Seamless Carbon and Alloy Steel Standard, Line, and

Pressure Pipe from Argentina, Brazil, Germany, and Italy, CR List

2, Doc. Nos. 114, 117, 118, 123, 126-129 at Question IV-6.

According to the ITC, all three responding purchasers on the

question of Brazilian SLP prices indicated that Brazilian SLP was

more cheaply priced than domestic SLP. See Commission’s Views, CR

List 2, Doc. No. 78 at 28 n.170; Staff Report, CR List 2, Doc.

No. 76 at Page V-17. Four out of five purchasers responding to a

question on the price of Argentinian SLP stated that Argentinian

SLP was more cheaply priced than domestic SLP, five of eight

responding purchasers stated that German SLP was more cheaply

priced than domestic SLP, with the other three indicating that

German SLP was priced the same or higher than domestic SLP (the

Court’s review of the questionnaire responses counts only seven

responding purchasers on this question, with five responding that

German SLP was cheaper than domestic, one indicating that German

SLP cost the same as domestic, and one indicating that it cost

more). See id.; see also Responses to Purchasers’ Questionnaire,

Certain Seamless Carbon and Alloy Steel Standard, Line, and

the domestic and subject product are generally not a significant

factor in their sales. See id. at 27-28.21 Finally, the ITC finds

that price and quality were the two factors ranked highest by

purchasers in making purchasing decisions, and that a majority of

purchasers indicated that subject imports are cheaper than the

domestic like product.22 See id. at 28.
Court No. 01-00603 Page 38

Pressure Pipe from Argentina, Brazil, Germany, and Italy, CR List

2, Doc. Nos. 114, 117, 118, 123, 126-129 (not including 127A) at

Question IV-6. 

As with likely volume, the Court cannot find that the evidence

on the record supports ITC’s finding that the likely price effects

support a finding of likely continuation or recurrence of material

injury. 

With regard to the first subfactor, underselling, the ITC

relies on the answers to a particular question in its purchasers’

questionnaire. Commission’s Views, CR List 2, Doc. No. 78 at 27-

28; see also Staff Report, CR List 2, Doc. No. 76 at Table II-1;

see, e.g., Company X Purchasers Questionnaire, CR List 2, Doc. No.

111 at Question III-23 (Feb. 12, 2001). In this question, the ITC

asked purchasers of SLP to list, in order of importance, the three

most important factors in deciding from which supplier to purchase

SLP. See, e.g., Company X Purchasers Questionnaire, CR List 2,

Doc. No. 111 at Question III-23 (Feb. 12, 2001). The ITC provided

SLP purchasers with a list of example factors, including “current

availability, extension of credit, prearranged contracts, price,

quality of product, range of supplier’s product line, traditional

supplier, etc.” Id. Out of the nineteen purchasers responding to

the question, six rated price as the number one factor, six rated

price as the number two factor, five rated price as the number

three factor, and two did not rate price as one of the top three
Court No. 01-00603 Page 39

23Eight purchasers listed quality as the number one factor,

three listed it as the number two factor, and four listed it as

the number three factor. See Staff Report, CR List 2, Doc. No.

76 at Table II-1. Availability was listed as the number one

factors by two purchasers, as the number two factor by six

purchasers, and as the number three factor by one. Id. Other

factors, including “loyalty,” “service,” “competitive advantage,”

“delivery,” and “market acceptability” were ranked as the number

one factor by three purchasers, as the number two factor by five

purchasers, and as the number three factor by nine purchasers. 

Id.

24Sixteen purchasers responded to this particular question. 

See Responses to Purchasers’ Questionnaire, Certain Seamless

Carbon and Alloy Steel Standard, Line, and Pressure Pipe from

Argentina, Brazil, Germany, and Italy, CR List 2, Doc. Nos. 113-

115, 117, 118, 121-30 (including 127A).

factors in making purchasing decisions.23 See Staff Report, C.R.

List 2, Doc. No 76 at Table II-1. Though this evidence on its own,

along with evidence showing that subject merchandise significantly

undersold the domestic like product during the period covered by

the original investigation and that subject country prices for SLP

are lower than domestic SLP prices, might be enough to support the

ITC’s determination that significant underselling would be likely

to occur, it is not the only evidence on the record. 

The ITC asked purchasers of SLP another question, in which

purchasers were invited to rank fourteen purchasing factors as

either very important, somewhat important, or not important. See,

e.g., Company X Purchasers Questionnaire, CR List 2, Doc. No. 111

at Question IV-10 (Feb. 12, 2001).24 The ITC then took note of how

many purchasers noted each factor as “very important.” Five

factors were rated as “very important” more often than price. See
Court No. 01-00603 Page 40

Staff Report, CR List 2, Doc. No. 76 at Page II-13 and Table II-2.

Of the five factors rated more important than price – product

quality, product consistency, reliability of supply, delivery time,

and availability - SLP purchasers indicated that the domestic

product was superior to foreign SLP on delivery time and

availability, as good or better on reliability of supply, and

generally comparable on product consistency and quality. See Staff

Report, CR List 2, Doc. No. 76 at Table II-7. 

This second survey appears to cloud what might have been a

clear picture of price importance; to wit, it renders unclear what

is meant by “price” in the first survey. For instance, the five

factors rated more highly than price, and as to which domestic SLP

is superior or comparable, could affect prices, inasmuch as long

wait times, inefficient delivery systems, and batches of poorly

made product add to the cost of doing business. That is to say,

even if initial prices for foreign SLP are lower than prices for

domestic SLP, the low initial price may be offset by domestic

producers’ superior ability to deliver merchandise quickly, on

time, over a long period of time, with relative consistency. The

ITC did not discuss the effects of the second survey or the

evidence that domestic SLP was considered superior or comparable to

foreign SLP on five factors more commonly rated as very important

than price, and provides no analysis of how or whether domestic

SLP’s superiority on certain factors makes it a “better bang for
Court No. 01-00603 Page 41

25Cf. supra note 4.

the buck” than ostensibly lower-cost foreign SLP.25 While the Court

will defer to the ITC’s reasonable interpretation of the evidence,

here the ITC offers no interpretation at all of the conflicting

evidence in the record.

The Court therefore remands the ITC’s finding on likely price

effects for re-evaluation in light of its remand findings on

volume, for further consideration of the meaning and importance of

the second survey which the ITC conducted of producers and which

found five factors more important than price in SLP purchasing

decisions, and on which domestic SLP was rated as superior or

generally comparable by respondent purchasers, and for

clarification of its finding on price suppression and depression.

iii. ITC’s Findings on the Likely Impact of

 Imports Are Not Supported By Substantial

Evidence

Inasmuch as the ITC’s findings as to the likely impact of

subject imports are based on its likely volume and likely price

effects findings, they must be remanded for further consideration

in light of the remand determinations on volume and price effects.

However, there is also an independent reason to remand ITC’s impact

finding: its failure to properly account for or explain evidence

that suggests that the domestic industry would not be vulnerable to
Court No. 01-00603 Page 42

26The Court notes that 1999 appears to have been a bad year

for seamless pipe manufacturers globally. Subject producers’

actual production of seamless pipe and capacity utilization

slumped in 1999, only to recover markedly in 2000. See Staff

Report, CR List 2, Doc. No. 76 at Tables IV-4, IV-6, and IV-8.

Total shipments were also smaller than in previous years,

although for the Brazilian producer, shipments in 1999 were

slightly higher than in 1998, albeit far below shipments in 1997. 

See Staff Report, CR List 2, Doc. No. 76 at Tables IV-3, IV-5,

and IV-7. 

injury even were the order revoked. 

The ITC found that the domestic SLP industry’s financial

condition improved after the imposition of the antidumping orders

in 1995, but substantial losses were sustained in 1999. See

Commission’s Views, CR List 2, Doc. No. 78 at 28-29.26 The industry

recovered somewhat in 2000. Id. at 29. However, between 1995 and

2000, the domestic industry’s U.S. shipments, capacity to produce,

capacity utilization, and actual production all declined. Id.

At the same time, the record appears to show that apparent

U.S. consumption of SLP jumped drastically in 2000 and that

industry prognostications indicate that the market will continue to

grow. See Commission’s Views, CR List 2, Doc. No. 78 at 29 n.180.

Respondent domestic SLP firms indicated that they were

commissioning new operations, and that operating margins were

increasing despite parallel increases in raw material costs.

Moreover, antidumping orders were placed on SLP imports from the

Czech Republic, Japan, Romania, and South Africa. Id.

The ITC discounts these developments by noting that it did not

find that they rebutted a finding that the industry was vulnerable
Court No. 01-00603 Page 43

27Three of the six Commissioners apparently found the

indications of growing industry strength so persuasive that they

determined that the domestic industry was not vulnerable to

material injury in the event of revocation. See Commission’s

Views, CR List 2, Doc. No. 78 at 29 n.180. This indicates that

not only is there conflicting evidence on the record, but that it

has some weight.

to material injury. See Commission’s Views, CR List 2, Doc. No. 78

at 29 n.179. Specifically, the ITC mentions operating losses

sustained in 1999, and the bankruptcy of one domestic producer as

signs that the domestic industry is still vulnerable. The ITC’s

discussion, however, is scanty. Without some further indication of

how and why improving industry indicators affect the equation, the

Court is unable to review ITC’s determination.27

The Court therefore remands the ITC’s finding as to the likely

impact of subject imports in the event of revocation for further

consideration in light of the remand determinations with regard to

likely volume and likely price effects, and for further discussion

and explanation of why the ITC found that the SLP industry’s

newfound strength did not suffice to defeat a finding of likelihood

of material injury.

CONCLUSION

The Court remands this sunset review to the ITC for

clarification regarding the standard of “likeliness” employed, and,

if an improper standard was used, reconsideration in light of the

proper standard. Moreover, the Court finds that while, given the
Court No. 01-00603 Page 44

proper standard of review, ITC’s determination as to cumulation of

subject imports is supported by substantial evidence, its

determination that material injury is likely to reoccur in the

event of revocation is neither in accordance with law nor supported

by substantial evidence. The ITC failed to properly interpret the

requirements of the “product-shifting” subfactor with regard to its

volume finding. Moreover, each of the three factors upon which the

ITC based its overall material injury finding is unsupported either

because of deficiencies in the record evidence, or because ITC

failed to explain how it arrived at its conclusions. On remand,

the Court directs the ITC to identify whether it is economically

feasible for subject producers to product-shift from other products

to SLP for the U.S. market, to identify the weight it gives to

subject producers’ international corporate contacts and such

contacts’ effects on the volume calculus, to further discuss and

explain the effects of its two purchasers’ questionnaires on the

importance of price in purchasing decisions, to clarify its

position with regard to price suppression and depression, and to

further discuss and explain why increasingly positive market

indicators do not defeat a finding of vulnerability to material

injury. 

Commerce shall have until January 24, 2005 to submit its

remand determination. The parties shall have until February 8,

2005 to submit comments on the remand determination. Rebuttal

comments shall be submitted by February 22, 2005. 
Court No. 01-00603 Page 45

It is so ordered.

 /s/Donald C. Pogue 

 Donald C. Pogue

 Judge

Dated: October 27, 2004

New York, New York