Court Opinion

ID: 817694
Source: CourtListenerOpinion
Date Created: 2013-02-01 01:57:05.473513+00
Date Added: 2024-06-11T13:13:03.669367
License: Public Domain

Slip Op. 09 - 5

 UNITED STATES COURT OF INTERNATIONAL TRADE

                                     :
DIAMOND SAWBLADES                    :
MANUFACTURERS COALITION,             :
                                     :
                       Plaintiff,    :
                                     :
               v.                    :                     Before: MUSGRAVE, Senior Judge
                                     :                     Court No. 06-00247
UNITED STATES,                       :
                                     :                     PUBLIC VERSION
                       Defendant,    :
                                     :
              and                    :
                                     :
ST. GOBAIN ABRASIVES, INC., EHWA :
DIAMOND INDUSTRIAL CO., LTD., and :
SHINHAN DIAMOND INDUS. CO., LTD., :
                                     :
              Defendant-Intervenors. :
                                     :

                                          OPINION

[Sustaining the ITC’s Remand Determination.]

                                                                     Decided: January 13, 2009

       Wiley, Rein & Fielding, LLP (Daniel B. Pickard) for the plaintiff.

       James M. Lyons, General Counsel, Neal J. Reynolds, Assistant General Counsel, Office of
the General Counsel, U.S. International Trade Commission (Charles A. St. Charles) for the
defendant.

       Akin Gump Strauss Hauer & Feld, LLP (J. David Park, Jarrod M. Goldfeder, Lisa W. Ross,
Spencer S. Griffith, and Valerie A. Slater) for the defendant-intervenors Ehwa Diamond Industrial
Co., Ltd. and Shinhan Diamond Industrial Co., Ltd.

       Thompson Hine, LLP (Lynn M. Fischer Fox) for the defendant-intervenor Saint-Gobain
Abrasives, Inc.
Court No. 06-00247                                                                             Page 2

       This matter comes before the court as a result of the court’s decision in Diamond Sawblades

Mfr’s. Coalition v. United States, Slip Op. 08-18 (Feb. 6, 2008). In that case, the court remanded

a decision of the U.S. International Trade Commission (“Commission” or “ITC”) that determined

the domestic diamond sawblade industry was neither materially injured nor threatened with material

injury by reason of subject imports from China and Korea. See Diamond Sawblades, Slip Op. 08-18;

Diamond Sawblades and Parts Thereof from China and Korea, Investigation Nos. 731-TA-1092 and

1093 (Final), USITC Publication 3862 (July 2006) Public R. Doc. 249 (“Original Determination”).

In its opinion, the court found that the ITC had failed to provide an adequate explanation or

substantial evidentiary support for certain ITC findings relating to the degree of competition between

subject imports and the domestic product; the court remanded the matter and instructed the

Commission to reconsider and explain more fully its negative-injury determination in light of the

court’s findings. Diamond Sawblades, Slip Op. 08-18. In the determination issued pursuant to the

court’s remand, the Commission affirmed its negative finding as to present material injury, but

reversed its position on threat of material injury (rendering an affirmative finding by a vote of 3-3).

Diamond Sawblades and Parts Thereof from China and Korea, Investigation Nos. 731-TA-1092 and

1093 (Final) (Remand), USITC Pub. 4007 (May 2008) Public R. Doc. 305R (“Remand

Determination”).    Defendant-Intervenors Saint-Gobain Abrasives, Inc. (“St. Gobain”) Ehwa

Diamond Industrial Co., Ltd. (“Ehwa”) and Shinhan Diamond Industrial Co., Ltd. (“Shinhan”)

(hereinafter collectively “Respondents”) assert that the Remand Determination is contrary to law and

urge the court to reverse the ITC’s decision or to remand the matter for further consideration. The

Commission, joined with Plaintiff Diamond Sawblades Manufacturer’s Coalition (“DSMC”), argues
Court No. 06-00247                                                                           Page 3

that the decision should be sustained. This court has jurisdiction pursuant to 28 U.S.C. § 1581(c)

(2000). For the reasons set forth below, the court will sustain the Remand Determination.

                                         I. Background

       The facts of this case were extensively summarized in the court’s previous opinion on this

matter and need not be fully repeated here. See Diamond Sawblades, Slip Op 08-18 at 2-10. In July

2006, the Commission determined, by a 4-2 vote, that an industry in the United States was not

materially injured or threatened with material injury by reason of imports of diamond sawblades or

parts thereof from China and Korea. Original Determination at 3. The Commission found that

although subject imports were entering the United States in significant volumes, had increased

market share, and significantly undersold the domestic like product, there was “no causal nexus

between the subject imports and the condition of the domestic industry,” because competition

between the domestic product and subject imports was limited. Original Determination at 29, 31,

36. Specifically, the Commission found that “[c]ompetition between the subject imports and the

domestic product [was] limited by differences in the type of end user to which sales [we]re made,

the diameters of the blades sold, and the differences in blade type and the manufacturing process.”

Original Determination at 28.

       The court remanded the Original Determination upon finding, inter alia, that the

Commission’s finding of limited competition lacked substantial evidentiary support. The court

specifically found that (1) the limited-competition finding could not be explained by differences in

sawblade diameter because record data showed heavy competition in the midrange (10-14") diameter

blades, where half of all sales (by revenue) were concentrated; (2) the limited-competition finding
Court No. 06-00247                                                                              Page 4

could not be explained by differences in blade type and manufacturing process because the

substantial majority of midrange sawblades were of the same type (segmented) and manufactured

with the same process (laser welding); and (3) the Commission had failed to adequately explain its

finding that “branded” and “nonbranded” distributors did not compete when evidence showed that

both distributor types served the same end user. Diamond Sawblades, Slip Op. at 16-18.

       On remand, the Commission reopened the record for the purpose of collecting additional

information pertinent to its analysis as to whether competition between subject imports and the

domestic like product was limited by differences in products and/or customer types. See Diamond

Sawblades and Parts Thereof from China and Korea, 73 Fed. Reg. 16910, 16911 (ITC March 31,

2008) (notice of remand proceedings). In consideration of that data and the court’s remand

instructions (and with the replacement of two of the original six commissioners) the ITC issued a

new decision on May 14, 2008. In that decision, the Commission again found that the domestic

industry was not materially injured by reason of subject imports, but reversed its position on the issue

of threat-of-material-injury. Remand Determination at 1. That reversal was based, in part, upon its

reversal on the issue of competition, where, according to the Commission, “the record leaves no

doubt that there is considerable overlap in the mid-range sizes and that U.S.-, Chinese-, and Korean-

produced finished diamond sawblades compete with each other in the same end-user markets and

across a range of product sizes.” Remand Determination at 16.

       Respondents contend that the Remand Determination is erroneous because, inter alia, (1) the

finding of substantial competition is unlawful and ignores substantial record evidence; (2) the threat

determination is unsupported by substantial evidence and contrary to law; and (3) the Commission
Court No. 06-00247                                                                            Page 5

improperly concluded that the analysis advocated in Bratsk Aluminum Smelter v. United States,

444 F.3d 1369 (Fed. Cir. 2006), does not apply to a threat determination. St. Gobain Br. at 5-7, 24;

Ehwa/Shinhan Br. at 5, 10, 21. Respondents Ehwa and Shinhan argue separately that the ITC’s

decision to cumulate Korean and Chinese imports is contrary to law. Ehwa/Shinhan Br. at 3.

Respondent St. Gobain contends that the findings of the Remand Determination are entitled to

“considerably less deference” from the court because the ITC reversed itself from the prior decision.

St.Gobain Br. at 2. For the reasons set forth below, the court will sustain the Remand Determination.

                                      II. Standard of Review

         The Court must uphold the Commission’s determination unless it finds that the determination

is “unsupported by substantial evidence on the record, or otherwise not in accordance with law.”

19 U.S.C. § 1516a(b)(1)(B) (2000). The United States Court of Appeals for the Federal Circuit

(“Federal Circuit”) has stated that “in the hierarchy of the four most common standards of review,

substantial evidence is the second most deferential, and can be translated roughly to mean is [the

determination] unreasonable?” Nippon Steel Corp. v. United States, 458 F.3d 1345, 1351 (Fed. Cir.

2006) (internal citation and quotations omitted) (alteration in original).

         The ITC’s factual determinations are “presumed to be correct,” and the burden of

demonstrating otherwise rests upon the party challenging the determination. 28 U.S.C. § 2639(a)(1)

(2000). Further, the Commission “is not required to explicitly address every piece of evidence

presented by the parties, and absent a showing to the contrary, the ITC is presumed to have

considered all of the evidence on the record.” Nucor Corp. v. United States, 28 CIT 188, 234,

318 F. Supp. 2d 1207, 1247 (2004) (quotations and citation omitted) aff’d, 414 F.3d 1331 (Fed. Cir.

2005).
Court No. 06-00247                                                                           Page 6

                                         III. Discussion

                           A. Deference Afforded to Agency Reversals

       At the outset, Respondent St. Gobain suggests that the Commission’s new decision is entitled

to less deference from the court because it constitutes a reversal from a prior determination.

St. Gobain points out that under the INS v. Cardoza-Fonseca line of cases, agency decisions that

reverse prior decisions are “entitled to considerably less deference” from the Court. St. Gobain Br.

at 2 (citing INS v. Cardoza-Fonseca, 480 U.S. 421, 446, n.30 (1987)); Conf. Oral Arg. Tr. at 7.

       The court finds this argument meritless. The “deference” discussed in Cardoza-Fonseca

refers to the deference afforded to an agency’s interpretation of a statute, otherwise known as

“Chevron deference.” See Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc.,

467 U.S. 837 (1984). A similar concept of deference is afforded to an agency’s reasonable

interpretation of its own regulations, particularly when that interpretation reflects an agency’s

longstanding policies or guidelines. See Smiley v. Citibank (South Dakota), N.A., 517 U.S. 735

(1996); Gose v. U.S. Postal Svc., 451 F.3d 831 (Fed. Cir. 2006). That deference is substantially

diminished, however, where an agency’s interpretation of the statute or regulation at issue is

inconsistent with its prior interpretations of the provision. Thomas Jefferson Univ. v. Shalala, 512

U.S. 504, 515 (1994).

       Respondent’s suggestion—that the policy of affording the agency “considerably less

deference” should be applied to an agency’s reversal on the outcome of a particular decision—

cannot be accepted. Among other things, such a policy would be inconsistent with the purpose of

this court’s remand (which was based, in part, on a “substantial doubt whether the Commission

would have made the same ultimate finding with the erroneous findings removed from the picture”)
Court No. 06-00247                                                                           Page 7

and contrary to the deference inherent in this Court’s statutorily-mandated standard of review. See

19 U.S.C. § 1516a(b)(1)(B). Accordingly, the court must afford to the Commission the same

deference in the Remand Determination as that afforded to it in the Original Determination.

                                     B. Competition Finding

       As in the court’s previous review, one of the principal points of controversy in this matter

concerns the Commission’s competition finding. Respondents now argue that the Remand

Determination’s finding of “substantial competition throughout the market” is unsupported by

substantial evidence and contend that the finding of attenuated competition in the Original

Determination was correct. St. Gobain Br. at 8; Ehwa/Shinhan Br. at 5. Respondent St. Gobain

asserts that the ITC ignored evidence that the market is “highly segmented” between the “DIY[(do-it-

yourself)]/general contractor” (also referred to as “general use”) market and the “professional”

market, and ignored evidence showing that the domestic industry sold only “professional”

sawblades, while the subject importers sold blades almost exclusively to the “DIY/general

contractor” market. St. Gobain Br. at 9. Respondents assert further that the ITC ignored evidence

of attenuated competition based on channels of distribution and ignored that price differentials

between subject imports and domestic blades demonstrate that these are “two different products that

do not compete.” Ehwa/Shinhan Br. at 6-7. Although the respondents arguments are intertwined,

the court will address those arguments seriatim.

                   1. Attenuated Competition based on Market Segmentation

       Respondent St. Gobain first takes issue with the Commission’s “summary reject[ion]” of its

contention that the diamond sawblade market is highly segmented into “professional” and
Court No. 06-00247                                                                           Page 8

“DIY/general contractor” market segments. St. Gobain Br. at 9. Respondent argues that the highly

segmented market severely attenuates competition because the domestic industry is almost

exclusively relegated to the “professional” market while the subject imports are similarly relegated

to the “DIY/general contractor” market. Id.

       The court is unable to accept these arguments. Although some evidence supports the

respondent’s contentions, the Commission’s decision to reject the “professional” vs. “DIY/general

contractor” dichotomy was not unreasonable and is supported by substantial evidence. The

Commission discussed the problems with market segmentation based on these divisions in the

Remand Determination, where it noted:

               Although respondents contend that the U.S. diamond sawblade
               market is “highly segmented” into “professional-use” and “general
               use” categories, with larger-diameter blades often being used by the
               professional-use segment (by which they mean specialized concrete
               contractors), petitioners argue that there are no clear dividing lines.
               Respondents themselves were unable to define the professional-use
               market clearly, arguing during the preliminary phase investigations
               that size was an important factor in establishing a dividing line
               between “professional” and “general” use and then arguing during the
               final phase investigations that the dividing line was based on the
               horsepower of the saw in which the blade was used. Contrary to
               respondents’ argument, the record demonstrates an overlap in usage
               by “professional” concrete contractors, general contractors, and DIY
               end users, notably in the midrange-diameter category.

Remand Determination at 30 (Separate Views); Remand Determination at 5 (Views of the

Commission).

       Substantial evidence supports the Commission’s analysis. As noted above, the Commission

rejected professional vs. general use market segmentation upon finding that the distinctions between

the proposed segments were unclear, and that, even where the distinctions were clear, the record
Court No. 06-00247                                                                            Page 9

demonstrated a substantial overlap in usage, particularly in the midrange blades. Evidence of record

supporting the Commission’s findings falls into three categories: (1) evidence that the definition of

a “professional” was not always clear; (2) evidence that the definition of a professional blade was

changed as the investigation progressed; and (3) evidence that the domestic industry supplied blades

to general contractors and that the subject imports supplied professional end users.

       For example, in the Original Staff Report the ITC staff observed that “professional”

sawblades were generally characterized as those that were (1) sold to “professionals,” i.e., end users

in the road and commercial construction industry; (2) largely segmented and greater than 14" in

diameter; and (3) “typically custom engineered for the industry.” ITC Staff Report, Pub. R. Doc. 249

(“Original Staff Report”) at I-10. However, evidence of record shows that this definition was

quickly contradicted. See Hearing Tr. at 38-39 (Ms. O’Day) (stating that her definition of the term

“professional[] . . . includes both general contractors and specialty contractors, plumbers,

electricians, masons, construction contractors, refractory tile and marble installers, as well as

concrete sawing and breaking specialists.”); id. at 90 (Mr. Garrison (U.S. producer)) (testifying that

custom blades were a “very small” (5-15%) portion of his business).

       Further, that “professional” blades were defined as greater than 14" in diameter did not

support the respondent’s assertions regarding the “professional” focus of the domestic industry

because data showed that the primary area of competitive overlap (and a substantial portion of the

revenue of both the subject imports and the domestic industry) was in the midrange (10-14"

diameter) blades. That is, according to the definitions of professional and DIY/general contractor

blades provided above, a midrange sized sawblade would be categorized as a general contractor
Court No. 06-00247                                                                            Page 10

blade. However if midrange blades are for general contractors and the domestic industry’s largest

percentage of revenue is from midrange blades, the claim that the domestic industry focuses almost

exclusively on professional blades cannot be true.

       Respondent asserts that the type of blade and the process by which it is manufactured further

distinguishes professional from general use blades. However, as the court noted in its previous

opinion on this matter, because a substantial majority of all sawblades sold in the U.S., regardless

of source, were of the same type (segmented) and manufactured with the same process (laser

welding), those factors are of little use as distinguishing characteristics.

       Respondent then points to testimonial evidence indicating that the most relevant

characteristic of a sawblade is the horsepower rating, and that only professional blades are designed

for use on high-horsepower (greater than 35Hp) equipment. See Hearing Tr. at 307 (Mr. Nixon)

(“We’ve chosen 35 horsepower as kind of the line in the sand that depicts the professional user.”).

The court finds this assertion unconvincing. Although there is little data in the record on the subject

of horsepower ratings, where that information does exist— in the individual product comparisons—

the data do not support the respondent’s primary argument that the domestic industry was relegated

to professional (when defined as high-horsepower) blades. For example, of the seven products

compared, products 2, 3, 4, and 5 were mid-range (10-14" diameter) blades. Of those blades, only

Product 5 was designated as high horsepower. Yet data show that subject import sales of Product 5

were almost equal to the domestic industry sales of Product 5. See Original Staff Report at V-37-39,

Tables V-5a, V-5b, V-5c. Further, in products 2, 3, and 4, which were not high-horsepower blades,

the domestic industry dominated almost every sales category. Id.
Court No. 06-00247                                                                         Page 11

                2. Attenuation of Competition based on Channels of Distribution

       In the Original Determination the Commission found that competition was attenuated by

channels of distribution based in part upon finding that the “distributors” channel (through which

both the domestic industry and the subject importers sold the majority (by value) of their products)

should be further subdivided into “branded” and “nonbranded” distributors as separate channels of

distribution that did not compete with one another. Upon review, the court found that the

Commission had failed to provide an adequate explanation as to the difference between a “branded”

and “nonbranded” distributor, or how this division attenuated competition when evidence showed

that both types of distributors served the same end user. Slip Op. 08-18 at 16-17.

       In its new decision, the Commission reconsidered that finding in light of additional evidence

obtained on remand (as well as evidence of record) and changed its position on this issue. As noted

in the Remand Determination, the ITC found that, regardless of distributor type, “the products

ultimately are purchased and used thereafter largely by the same types of end users,” and thus

essentially compete in the same market. Remand Determination at 7.

                      a. Conflicting Evidence and the Remand Staff Report

       Respondent St. Gobain argues that the Remand Determination is fatally flawed in this regard

because the ITC ignored evidence showing that “branded” and “nonbranded” distributors were

distinctly separate channels of distribution, and based its conclusion on “end-user information

reported in a few distributor questionnaires.” St. Gobain Br. at 12-13. St. Gobain contends further

that, when the “self serving” responses of producer-purchasers were excluded, the remand

questionnaire data showed that a substantial majority of firms believed that nonbranded and branded
Court No. 06-00247                                                                          Page 12

distributors “seldom or never competed for business.” St. Gobain Br. at 14 (citing to Table III-1 of

the Remand Staff Report).

       The Commission’s determination that branded and nonbranded distributors compete is

supported by substantial evidence. Data contained in the Original Staff Report show that both

branded and nonbranded distributors (and one distributor self-defined as both) indicated “general

contractors” as their primary customer. Original Staff Report at II-7. Similarly, as discussed below,

additional questionnaire data presented in the Remand Staff Report may be reasonably interpreted

to show competition. See Remand Staff Report at Table III-1.

       The proper interpretation of information contained in the Remand Staff Report was a point

of some contention in this matter. To illustrate, Table III-1, the interpretation of which the

respondents challenge, is shown below.
Court No. 06-00247                                                                        Page 13

Remand Staff Report, Table III-1.

       In its questionnaire, the Commission asked sawblade purchasers to indicate “the extent to

which U.S. branded and unbranded distributors competed against each other” and derived table III-1

from the responses. Remand Staff Report at III-1. The Commission cited to Table III-1 in the

Remand Determination as evidence that branded and nonbranded distributors compete, noting that

“a substantial majority of all purchasers familiar with the issue . . . reported that branded and

unbranded sawblades always, frequently, or sometimes competed in all size ranges.” Remand

Determination at 7, n.40. Conversely, respondent St. Gobain argues that the data above actually

“show that the majority of firms with an opinion believed that branded and unbranded distributors

seldom or never compete for business,” and further that “when the self-serving responses of

Petitioners are excluded the distinction is even more obvious, with 14 [questionnaire responders]

reporting little or no competition and only nine reporting always or frequent competition.” St.

Gobain Br. at 14. Essentially, both respondents assert that the Commission’s choice to include the

“self-serving” responses of the producer-purchasers was error, and that the Commission’s decision

to group the “sometimes” responses together with the “always” and “frequently” responses was

unreasonable. St. Gobain Br. at 14; Ehwa/Shinhan Br. at 9.

       The court must reject these arguments. The respondents have pointed to no evidence

impeaching the credibility of the producer-purchaser responses that would make the ITC’s decision

to include those responses unreasonable. Nor can the court conclude that it was unreasonable for

the Commission to interpret a response that distributors “sometimes” compete as evidence of

competition, as opposed to evidence of limited competition. The respondents are asking the court
Court No. 06-00247                                                                           Page 14

to reweigh the evidence and to displace the agency’s interpretation of that evidence with its own.

This the court is not permitted to do. See Universal Camera Corp. v. NRLB, 340 U.S. 474, 488

(1951) (holding that the court may not “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.”); Usinor v. United States, 28 CIT 1107, 342 F. Supp. 2d 1267, 1272 (2004). As

this court has noted on many previous occasions, “the possibility of drawing two inconsistent

conclusions from the evidence does not prevent an administrative agency’s finding from being

supported by substantial evidence.” Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 619-20

(1966), quoted in Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984).

                                     b. Commission Practice

       Respondents Ehwa and Shinhan object to the ITC’s nonbranded/branded distributor analysis

as “contrary to law” because it deviates from the Commission’s “consistent practice when evaluating

the extent of competition.”     Ehwa/Shinhan Br. at 6-7.       According to the respondents, the

Commission’s consistent practice in this regard “is to examine the purchasers to whom U.S.

producers and suppliers of subject imports first sell subject merchandise, and not the customers of

those purchasers further down the distribution chain.” Id. (emphasis in original).

       The court is unable to find merit in this argument. The cases offered by the respondents do

not support their contention either directly or by close analogy. The Commission practice (to which

those cases refer) of “examin[ing] prices for the first arm[’]s-length transaction in the U.S. market”

relates to the pricing data used to determine whether underselling has occurred, not whether the

products compete or whether distributors should be considered two separate channels of distribution.
Court No. 06-00247                                                                            Page 15

See Sodium Hexametaphosphate from China, Inv. No. 731-TA-1110 (Final), ITC Publication 3984

(Mar. 2008), 2008 WL 1727622. Moreover, this court’s remand was premised, in part, on the

Commission’s failure to provide an adequate explanation as to why “branded” and “nonbranded”

distributors should be considered different channels of distribution, particularly in light of evidence

suggesting that both distributor types served the same end user. Because the point of determining

“the existence of common or similar channels of distribution” is ultimately to determine whether the

subject imports compete with the domestic product, Wieland Werke, AG v. United States, 13 CIT

561, 563, 718 F. Supp. 50, 52 (1989), it was not unreasonable for the Commission to examine other

customers in the distribution chain to make that determination.

                   3. Attenuated Competition and Price Effects Determination

       Respondent St. Gobain contends that the price-effects data “provide significant additional

evidence that the Commission’s competition analysis is inaccurate” because “the incredibly large

price differential indicated that the products being compared were not the same.” St. Gobain Br. at

18. Respondent also asserts that the Commission’s price-depression finding itself is flawed in this

regard because the Commission’s price data do not reflect an “apples-to-apples,” comparison; that

is, “the imports are not underselling U.S. products but are actually lower-value/lower cost products

that should not fairly be compared to the higher-quality domestic products.” Id.

       The court is unable to accept these arguments. The Remand Determination indicates that the

Commission’s price-effects findings were based on data generated from comparisons within seven

individual diamond sawblade product groupings. The Commission requested information from the

domestic industry and the subject importers as to selling price, number of units sold, customer type,
Court No. 06-00247                                                                                   Page 16

etc., for each of the specified products. From that information the Commission derived various

findings (such as the degree of underselling) in regard to each product. See generally Original Staff

Report at V-19-24; see also Remand Determination at 14. A description of each product examined

is found in the Original Staff Report:

               Product 1.– 4" diameter laser-welded blades for dry cutting, 0.080" segment
               thickness, Premium grade blade (diamond impact strength within a TI/TTI range
               of 72-75 and diamond concentration in a range of 12-15 percent by volume of the
               segments or alternatively 0.55-0.65 carats/ccm);
               Product 2.– 12" diameter laser-welded blades for dry cutting, 0.110" segmented
               thickness, Premium grade blade (diamond impact strength within a TI/TTI range
               of 82-85 and diamond concentration in a range of 17-20 percent by volume of the
               segments or alternatively 0.75-0.85 carats/ccm) for use in high speed saws of 5,000
               rpm or more;
               Product 3.– 14" diameter laser-welded blades for dry cutting, 0.110" segment
               thickness, Premium grade blade (diamond impact strength within a TI/TTI range
               of 82-85 and diamond concentration in a range of 17-20 percent by volume of the
               segments or alternatively 0.75-0.85 carats/ccm) for use in high speed saws of 5,000
               rpm or more;
               Product 4.– 14" diameter laser-welded blades for dry cutting, 0.125" segment
               thickness, Premium grade blade (diamond impact strength within a TI/TTI range
               of 82-85 and diamond concentration in a range of 17-20 percent by volume of the
               segments or alternatively 0.75-0.85 carats/ccm) for use in high speed saws of 5,000
               rpm or more;
               Product 5.– 14" diameter laser-welded blades for wet cutting cured concrete,
               0.125" segmented thickness, Premium grade blade (diamond impact strength within
               a TI/TTI range of 74-77 and diamond concentration in a range of 33-35 percent by
               volume of the segments or alternatively 1.45-1.55 carats/ccm) for use in saws of 35
               hp or more;
               Product 6.– 18" diameter laser-welded blades for wet cutting cured concrete,
               0.125" segment thickness, Premium grade blade (diamond impact strength within
               a TI/TTI range of 74-77 and diamond concentration in a range of 33-35 percent by
               volume of the segments or alternatively 1.45-1.55 carats/ccm) for use in saws of 35
               hp or more; and
               Product 7.– 24" diameter laser-welded blades for wet cutting cured concrete,
               0.155" segment thickness, Premium grade blade (diamond impact strength within
               a TI/TTI range of 74-77 and diamond concentration in a range of 33-35 percent by
               volume of the segments or alternatively 1.45-1.55 carats/ccm) for use in saws of 35
               hp or more.

Original Staff Report at V-19. The data shown above do not indicate, as the respondents assert, that

the Commission’s price-effects determination was based on an “apples to oranges” comparison.
Court No. 06-00247                                                                          Page 17

Within each product type, the products compared appear to have been identical in terms of diameter,

type, manufacturing process, segment thickness, grade and concentration of diamonds, and

horsepower rating. If these are different products, the respondents have failed to explain what those

differences are. Accordingly, the respondent’s assertions must be rejected.

                                   C. Threat Finding Arguments

       Respondents assert that the Commission’s threat finding is unsupported by substantial

evidence and contrary to law. Respondents contend, inter alia, that (1) that the robust condition of

the domestic industry does not square with the Commission’s finding that the domestic industry is

threatened with material injury; (2) the Commission’s finding of “flattening” demand is contradicted

by substantial record evidence; and (3) that the Commission’s finding that subject imports can

“service the professional construction sector” is unsupported by substantial evidence. Ehwa/Shinhan

Br. at 11- 12, 17; St. Gobain Br. at 19, 20.

       The crux of the Commission’s finding is that the domestic industry was only able to remain

profitable (though the profits declined) because of the dramatic increases in demand for diamond

sawblades during the period of investigation (“POI”). However, the Commission reasoned, because

demand was expected to “flatten” and the subject imports were expected to continue to increase,

nothing would save the domestic industry from material injury. The Commission explained:

               The domestic industry’s ability to maintain profitability was
               attributable in large part to the high and increasing demand during the
               POI. Despite this favorable circumstance, as well as the success of a
               number of domestic producers in reducing their costs of production
               through increased productivity, reductions in employment, and
               investment in upgraded equipment, the industry’s operating income
               and operating income margin declined during the POI, as prices fell
               and material costs rose. We note that various domestic industry
Court No. 06-00247                                                                         Page 18

               representatives testified that cost and efficiency improvements have
               reached a limit and are not expected to have additional impact on the
               industry going forward. Now that demand is likely to flatten and low-
               priced subject imports are likely to continue to increase in the
               imminent future, the increasing volumes of imports will cause prices
               to decline further absent antidumping relief. These import increases
               and price declines will likely accelerate the loss of operating income,
               leading to material injury to the domestic industry.

Remand Determination at 23.

       Substantial evidence of record supports the Commission’s findings. It is undisputed that

demand for diamond sawblades dramatically increased during the POI, regardless of market segment.

The record also shows that, in spite of the increased demand, several indicators of the domestic

industry’s performance trended downward. The domestic industry’s market share for finished

diamond sawblades fell (by value) from [       ]% in 2003 to [     ]% in 2005; aggregate operating

income fell a total of [   ]% during the POI, as did the domestic industry’s aggregate operating

income margins (falling [ ]%) and aggregate return on assets (falling [ ]%). Moreover, as noted

below, evidence supports a finding of flattening demand and increasing subject imports.

Accordingly, the court must find that the Commission’s conclusion is supported by substantial

evidence and is not unreasonable.

       Respondents take issue with the fact that the ITC’s “flattening” demand finding was based

on questionnaire responses stating that demand for finished sawblades would not change in the

future. According to the respondents, “these responses indicate simply that demand would continue

to remain high and at strong levels,” and were not indicative of threat. Ehwa/Shinhan Br. at 11; see

also St. Gobain Br. at 20. Respondents assert further that the ITC ignored evidence showing that

demand would increase in the future, such as testimony regarding the passage of a highway bill that
Court No. 06-00247                                                                           Page 19

would generate demand for professional cutting blades, and further demand generated by Hurricane

Katrina rebuilding efforts. Ehwa/Shinhan Br. at 11, St. Gobain Br. at 21.

        The court finds no merit in these arguments. First, whether demand is high or low is

unrelated to whether that demand is increasing, decreasing, or flat. Evidence of record shows that

the majority of U.S. producers, the majority of U.S. importers, and the majority of other U.S.

purchasers all reported that they did not expect demand to change in the future; a minority expected

demand to increase or decrease. Original Staff Report at II-37. Hence, the Commission’s finding

of “flattening demand” is supported by substantial evidence. Second, the Commission is presumed

to have considered all of the evidence before it. Although some evidence may be deemed to be of

such relevance that the failure to address it may require remand, Altx Inc., v. United States, 25 CIT

1100, 1117-18, 167 F. Supp. 2d 1353, 1374 (2001) (holding that the ITC must address evidence that

“seriously undermines its reasoning and conclusions”), testimony as to the potential effects of future

highway funds hardly rises to that level. Moreover, it appears that passage of the Highway Bill was

indeed factored into the Commission’s finding because, as noted in the Original Staff Report, the

firms that were expecting an increase in demand noted “more federal funds for highways and

bridges” as one of the reasons for that expectation. Original Staff Report at II-37. Accordingly, the

Commission’s determination in this regard is adequately explained and supported by substantial

evidence.

       Respondents Ehwa and Shinhan next attack the Commission’s finding regarding the

respondents’ ability to “service the professional construction sector,” and assert that the Commission

“cite[d] no evidence that imports will begin shifting to the larger-sized [blades] sold directly or
Court No. 06-00247                                                                               Page 20

indirectly to professional end users.” Ehwa/Shinhan Br. at 12-13. Respondents argue further that

subject imports of the larger-sized blades increased “[               ], by [          ]” during the POI

and that substantial evidence indicates that foreign producers were not able to service professional

construction users from abroad. Id.

        The finding to which the respondents apparently refer is found in the Remand Determination

at pages 22-23, where the Commission stated:

                  Contrary to the respondents arguments, no portion of the market, as
                  defined by size or end-user category, is sheltered from competition
                  with the subject imports. Cumulated subject import sales are
                  increasing in each size range, including the larger sizes in which
                  professional customers that may require post-sale customer service
                  dominate.

Remand Determination at 22-23. The Commission’s finding that subject importers had the ability

to infiltrate the larger-sized “professional” sawblades sector1 is supported by substantial evidence.

Although the respondents characterize the subject imports’ increase in large-blade sales as “[         ],”

data in the record indicates that the [                                     ]. See Original Staff Report

at Table IV-4. The respondents essentially attack the substantiality of the Commission’s findings

by offering their own interpretation of the evidence in support of an alternate conclusion. As to the

specific issue of “post-sale customer service,” the Commission noted evidence showing that “some,

but not all sales to professional concrete contractors may require customization, quick turnaround,

or onsite customer service,” and that even where such service was required, evidence suggested that

subject importers were not precluded from entering the market because of their ability to “provide

overnight shipping” and/or “service through their U.S. sales affiliates,” or service through U.S.

        1
            In this instance, the parties are referring to diamond sawblades greater than 20" in diameter.
Court No. 06-00247                                                                            Page 21

distributors. Remand Determination at 23 n.141. Accordingly, the court must conclude that the

Commission’s findings in this regard are not unreasonable and are supported by substantial evidence.

As noted above, it is not the function of the court to “reweigh the evidence or substitute its own

judgment for that of the agency.” Usinor, 342 F. Supp. 2d at 1272.

                                      D. Cumulation Argument

       Respondents Ehwa and Shinhan assert that the ITC’s decision to cumulate subject imports

in its threat analysis is unsupported by substantial evidence. Specifically, the respondents argue that

there were significant disparities between Korean and Chinese imports’ pricing and volume trends

during the POI, and that “ITC will not cumulate subject imports if, as here, subject imports are

[                                                                                                   ].”

Ehwa/Shinhan Br. at 3.

       The statute provides, in pertinent part:

                     (H) Cumulation for determining threat of material injury

                       To the extent practicable . . . for the purposes of clause (i)(III)
               and (IV) of subparagraph (F) the Commission may cumulatively
               assess the volume and price effects of imports of the subject
               merchandise from all countries . . . if such imports compete with each
               other and with domestic like products in the United States market.

19 U.S.C. § 1677(7)(H) (2000).

       Respondents appear to argue that the statute’s inclusion of the permissive “may,” together

with this Court’s history of upholding ITC decisions not to cumulate imports where a “great

disparity” in patterns of volume or underselling existed, amounts to a mandate that the Commission

“may not” cumulate imports if the patterns of volume or underselling are “substantially” different.
Court No. 06-00247                                                                              Page 22

Ehwa/Shinhan Br. at 4 (citing Torrington v. United States, 16 CIT 220, 229-30, 790 F. Supp. 1161,

1172 (1992).

        The court does not agree. The decision as to whether cumulation is appropriate in a threat

case is discretionary. If the imports at issue meet the ministerial requirements of section 1677(7)(H)

and “compete with each other and with the domestic like products,” the Commission may cumulate

if it finds it “practicable” to do so. The legislative history of the cumulation statute reveals that the

threat provision was made discretionary because Congress recognized “the difficulty of applying the

concept of cumulation to threat cases, and [did] not seek to require cumulation where it is

impracticable to do so because such assessment would be conjectural or speculative.” H.R. Rep. No.

100-40, pt. 1, at 131 (1987). Hence, where this Court has sustained the ITC’s decisions to not

cumulate in threat cases, it has done so in the spirit of deference to the ITC, requiring only that the

Commission’s decision be adequately explained, reasonable, and supported by substantial evidence.

See Asociacion Colombiana de Exportadores de Flores v. United States, 12 CIT 1174, 1178, 704

F. Supp. 1068, 1072 (1988) (cited by Torrington, supra).

        In this case, the Commission’s decision to cumulate was not unreasonable. During the POI,

Korean imports increased [       ] percent (by value) and Chinese imports increased [         ] percent;

Korean imports undersold domestic sawblades in 189 of 245 comparisons at margins ranging up to

80.8 percent, while Chinese imports undersold domestic sawblades in 112 of 115 comparisons at

margins ranging as high as 84.4 percent. Remand Determination at 14; Original Staff Report at V-

62, Table V9c. Although these data reflect differences in the rate of increase and degree of

underselling, those differences are insufficient to render unreasonable the ITC’s decision to
Court No. 06-00247                                                                           Page 23

cumulate, or that cumulation was “practicable” under the circumstances. Accordingly the court must

sustain the ITC’s decision to cumulate the subject imports.

                                         E. Bratsk Analysis

         Finally, Respondents contend that the Commission’s failure to apply the Bratsk test was error

and requires remand. E.g., Ehwa/Shinhan Br. at 21, 23 (citing Bratsk Aluminum Smelter v. United

States, 444 F.3d 1369 (Fed. Cir. 2006)). Respondents contend that “[u]nder Bratsk the ITC is

required to determine if third-country imports will, in part, replace subject imports,” and that a

proper application of the Bratsk test in this case “produces startling results.” Id. These “startling

results,” according to the respondents, would show that [

                                            ] and that [

                                                           ]. Respondents contend that, because the

ITC failed to perform the analysis mandated by Bratsk, the ITC failed to take into account the

increasing non-subject imports “which strongly indicates that subject imports do not threaten injury

to the U.S. domestic injury because non-subject imports could ‘replace’ them.” Ehwa/Shinhan Br.

at 24.

         The ITC contends that because Bratsk and its holdings were made in the context of a present

material injury finding, there is no clear mandate from the Federal Circuit that such an analysis is

required where only threat of material injury is at issue. ITC Br. at 21. Additionally, the ITC

asserted at oral argument that the respondents never presented the Bratsk argument to the

Commission, and, accordingly, had failed to exhaust administrative remedies on this issue. Conf.

Oral Arg. Tr. at 48. For the reasons set forth below, the court agrees.
Court No. 06-00247                                                                           Page 24

       In Mittal Steel, the Federal Circuit clarified that the inquiry required by Bratsk

               is not concerned with whether an antidumping order would actually
               lead to the elimination of those goods from the market in the future
               or whether those goods would be replaced by goods from other
               sources. Rather, the inquiry is a hypothetical one that sheds light on
               whether the injury to the domestic industry can reasonably be
               attributed to the subject imports. The focus of the inquiry is on the
               cause of injury in the past, not the prospect of effectiveness in the
               future.

Mittal Steel, 542 F3d at 876 (emphasis added). According to Mittal Steel, Bratsk essentially calls

for a “but-for”causation test when certain “triggering” factors are present: When the ITC’s inquiry

“is centered on a commodity product, and price competitive non-subject imports are a significant

factor in the market,” the Commission is required “to explain why . . . it concluded that the subject

imports caused material injury to the domestic industry.” Id. at 1375. In essence, Mittal Steel

clarified that a Bratsk analysis is a method of assessing of whether the injury suffered by the

domestic industry was “by reason of” the subject imports and not “by reason of” nonsubject imports.

       Accordingly, the court must reject as incorrect the respondents’ interpretation of Bratsk as

requiring an analysis as to the potential beneficiaries of an antidumping order. In other words,

Respondents’ assertions as to the “startling results” that would ensue in the wake of antidumping

duties are not part of the causation analysis directed by Mittal Steel, but part of the “whether goods

would be replaced by other sources” question that Mittal Steel expressly rejected. As to the

argument of whether Bratsk must be applied to a threat analysis, the court finds that, for the reasons

stated below, it is unnecessary to decide that issue here.

       Administrative exhaustion of remedies is generally required before a litigant will be allowed

to raise a claim via a civil action. See 28 U.S.C. § 2637(d) (2000); Sharp Corp. v. United States,
Court No. 06-00247                                                                             Page 25

837 F.2d 1058, 1062 (Fed. Cir. 1988). A reviewing court usurps the agency’s function when it sets

aside a determination upon a ground not previously presented and deprives the agency of an

opportunity to consider the matter, make its ruling, and state the reasons for its action. United States

v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952).

       At oral argument the respondent asserted that the requirement of administrative exhaustion

of remedies should not apply in this matter because there was no opportunity to raise Bratsk at an

earlier time. Respondent contends that the question “didn’t become a germane and live issue until

the Commission on remand issued its threat finding for the first time in the history of this

proceeding.” Conf. Oral Arg. Tr. at 51. The court cannot agree. As noted above, Mittal Steel

clarified that a Bratsk analysis is part of a causation analysis. The issue of causation has been a

“germane and live issue” since the beginning of the investigation, and at no point in the investigation

did the respondents assert that nonsubject imports played any causal role in the condition of the

domestic industry. Accordingly, the court will decline to address this argument.

                                  F. Plaintiff’s Request for Relief

       Plaintiff DSMC requests that, should the court choose to affirm the Remand Determination,

the court (1) direct the ITC to “transmit its remand decision to [the Department of] Commerce and

to publish notice of the decision in the Federal Register” as required by law, (2) direct the

Department of Commerce “to publish notice of this court’s affirmation of the ITC’s final remand

decision in the Federal Register,” and (3) to “order the suspension of liquidation and collection of

cash deposits.” Pl’s. Br. at 22-23. DSMC contends that this additional action is necessary “to

provide effective relief” in this matter because, although the actions it requests the court to mandate
Court No. 06-00247                                                                              Page 26

are required by law, “the agencies have, in other cases, delayed such actions until all appeals are

exhausted.” Id. at 21.

        Because the plaintiff’s prayer for relief requires the court to take the additional steps of

ordering the ITC and Commerce to complete the specific actions listed above, the court will construe

the request as a petition for a writ of mandamus. See Decca Hospitality Furnishings, LLC v. United

States, 30 CIT 357, 363-64,427 F. Supp. 2d 1249, 1255 (2006).

        The common-law writ of mandamus, as codified in 28 U. S. C. §§ 1361, 1651(a) (2000) is

a drastic remedy, “to be invoked only in extraordinary situations.” Kerr v. U. S. Dist. Ct. N.D. Cal.,

426 U.S. 394, 402 (1976). Because a writ of mandamus is “one of the most potent weapons in the

judicial arsenal,” Cheney v. United States Dist. Court for D.C., 542 U.S. 367, 380 (2004), three

conditions must be met before the court may issue a writ: First, the party seeking issuance of the

writ must demonstrate that he lacks adequate alternative means to obtain the desired relief; second,

the petitioner must demonstrate a clear and indisputable right to the writ; and third, “even if the first

two prerequisites have been met, the issuing court, in the exercise of its discretion, must be satisfied

that the writ is appropriate under the circumstances.” Cheney, 542 U.S. at 380-81.

        The court is unable to find that a writ of mandamus is appropriate at this time. The plaintiff’s

request is based upon speculation that the ITC and Department of Commerce may, in the future, fail

to perform duties required by law. However, at the present time, the standard operation of the law

provides to the plaintiff an adequate means to attain the desired relief. Accordingly, the plaintiff’s

request must be denied.

        The court has considered the parties other arguments and finds them without merit.
Court No. 06-00247                                                                        Page 27

                                        IV. Conclusion

       Upon consideration of the foregoing, the court finds that the Commission’s Remand

Determination is not unreasonable and is supported by substantial evidence. Accordingly, the court

will sustain the Remand Determination in its entirety. Judgment will be entered accordingly.

                                               /s/ R. Kenton Musgrave
                                           R. KENTON MUSGRAVE, Senior Judge

Dated: January 13, 2009
       New York, New York