Opinion ID: 1255706
Heading Depth: 2
Heading Rank: 3

Heading: The Commission's Remand Determination

Text: Having concluded that the Original Determination should not be reinstated, we turn to Appellants' argument that the Remand Determination was not supported by substantial evidence. Appellants' main argument is that on remand, the Commission majority ignored the record evidence showing limited competition, as determined by the majority in the Original Determination. Appellants contend that the Commission assumed that the mere existence of some overlap in sales by subject and domestic producers was sufficient to conclude that they compete head-to-head across all size ranges. Specifically, Appellants assert that the Commission ignored the fact that much of the increase in subject import volumes was in size ranges and to customer types to which the domestic industry did not sell, and that the Commission also ignored differences between distributors. Appellants also argue that the Commission's threat of material injury finding was based on the following unsupported findings: (1) demand was flattening; (2) import volumes would continue to increase; (3) underselling by imports would continue; (4) the domestic industry would not maintain its strong profitability; and (5) subject imports could service the professional construction sector. Finally, Appellants assert that the Commission improperly declined to apply the non-subject replacement test outlined in Bratsk. 444 F.3d 1369. The Commission's factual determinations are presumed to be correct, and [t]he burden of proving otherwise shall rest upon the party challenging such decision. 28 U.S.C. § 2639(a)(1). After reviewing the record, we agree with DSMC and the ITC that substantial evidence supports the views of the Commission on each of the matters raised by Appellants on appeal. Accordingly, finding neither legal error nor insufficient evidence in the Commission's Remand Determination, we affirm the decision of the Court of International Trade in DSMC II. The concern underlying the Court of International Trade's remand in DSMC I that the Commission had not adequately explained its limited competition findingwas cured by the Commission in the Remand Determination, as the majority found that competition was not so limited. Instead, the Commission found significant overlap in imported and domestic mid-range sawblades. This conclusion was supported by substantial evidence. As explained in DSMC I, the record shows that approximately half of imports and domestic products were in the midrange category and a majority of those were laser-welded. DSMC I, slip op. at 14-16 (Table I-1, Table II-1). In addition, a majority of both imported and domestic sawblades were both laser-welded and segmented. International Trade Comm'n Staff Report, I-23 (Table I-2) (June 5, 2006) ( Original Staff Report ). The Commission's finding of substantial competition is also supported by the record relating to methods of distribution. For example, the record shows that half of responders reported that domestic producers and subject importers always, frequently, or sometimes compete in selling midrange sawblades to both professional users and contractors for general use. Int'l Trade Comm'n Staff Report, III-4 (Table III-2) (April 7, 2008) ( Remand Staff Report ). In addition, only 9 out of 39 responders indicated that sawblades used by professionals and individual consumers never compete. Id. III-5 (Table III-3). While there is also some support in the record for a contrary finding, the conclusion reached by the Commission need not be the only one possible from the record. Even if it is possible to draw two inconsistent conclusions from evidence in the record, such a possibility does not prevent [the Commission's] determination from being supported by substantial evidence. Am. Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed.Cir.2001). Nor do we find persuasive Appellants' arguments regarding the Commission's findings on threat of material injury. The record shows that a majority of importers, domestic producers, and other U.S. purchasers reported that they did not expect demand to change in the futurethereby providing substantial evidence for the Commission's finding that demand was flattening. Original Staff Report II-33. The Commission also based its finding that import volumes would continue to increase on substantial evidence. During the period of investigation, the evidence shows that the volume of subject imports increased significantly both in value and in quantity. Remand Determination App. 1. The market share of subject imports also increased during the period of investigation, while the market share of domestic producers declined. Id. In addition, subject importers predicted an increase in capacity, production, and inventory. Original Staff Report, VII-4, VII-10 (Table VII-2, Table VII-7). The Commission's finding that subject importers had the ability to infiltrate the larger-sized (greater than 20 inches in diameter) professional-use market was supported by the evidence that subject importers significantly increased the sales of these blades during the period of inquiry. Id. IV-9, IV-10 (Table IV-4) (indicating that U.S. sales of large sawblades from China more than doubled in value between 2003 and 2005 and U.S. sales of large sawblades from Korea increased 143 percent in value during that same time period). This evidence supports the Commission's conclusion that the volume of subject imports was likely to continue to rise and that underselling by subject imports would continue. The record also reveals that in addition to falling market share, the domestic industry's aggregate operating income, aggregate operating income margins, and aggregate return on assets all decreased during the period of inquiry, thus supporting the Commission's conclusion that the domestic industry would not maintain its strong profitability. Remand Determination App. 1. We have considered the other arguments made by Appellants regarding a lack of substantial evidence for the conclusions of the Remand Determination, but find them unpersuasive. Finally, Appellants assert that the Commission improperly declined to apply the non-subject replacement test outlined in Bratsk to its threat determination. In Bratsk, we required the Commission to assess whether non-subject imports would have replaced the subject imports without any beneficial effect on domestic producers. Bratsk, 444 F.3d at 1375. The parties dispute whether this analysis is limited to present injury findings or if it also applies to threat findings. The Commission did not apply the analysis, stating that Bratsk do[es] not apply to affirmative determinations based on threat of material injury, where a prospective ( i.e., forward-looking) analysis is involved. Remand Determination at 25 n. 152. The Court of International Trade declined to address the issue because at no point in the investigation did the respondents assert that nonsubject imports played any causal role in the condition of the domestic industry. DSMC II, slip op. at 25. We agree with the Court of International Trade that Appellants failed to exhaust their administrative remedies on this issue. Ehwa points to several sentences in its pre-hearing and post-hearing briefs to the Commission during the original investigation as evidence that they did not waive this issue. However, these isolated statements are simply not enough to indicate that Appellants effectively presented this issue to the Commission. In addition, before the Court of International Trade, counsel for Ehwa acknowledged that he did not raise the issue before the Commission in a timely manner. Id. The general rule is that courts should not topple over administrative decisions unless the administrative body not only has erred but has erred against objection made at the time appropriate under its practice. United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37, 73 S.Ct. 67, 97 L.Ed. 54 (1952). Accordingly, we decline to address this argument.