Papierfabrik August Koehler Ag v. United States , 413 F. App'x 227 ( 2011 )

NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
__________________________
PAPIERFABRIK AUGUST KOEHLER AG
AND KOEHLER AMERICA, INC.,
Plaintiffs-Appellants,
and
MITSUBISHI INTERNATIONAL CORPORATION,
MITSUBISHI HITEC PAPER FLENSBURG GMBH,
AND
MITSUBISHI HITEC PAPER BIELEFELD GMBH,
Plaintiffs,
v.
UNITED STATES,
Defendant,
and
INTERNATIONAL TRADE COMMISSION,
Defendant-Appellee,
and
APPLETON PAPERS INC.,
Defendant-Appellee.
__________________________
2010-1147
__________________________
Appeal from the United States Court of International
Trade in Case No. 08-CV-0430, Judge Donald C. Pogue.
PAPIERFABRIK AUGUST v. US 2
___________________________
Decided: January 11, 2011
___________________________
RICHARD P. FERRIN, Drinker Biddle & Reath LLP, of
Washington, DC, argued for plaintiffs-appellant. With
him on the brief was WILLIAM SILVERMAN.
MARK A. BERNSTEIN, Attorney, Office of the General
Counsel, United States International Trade Commission,
of Washington, DC, argued for defendant-appellee Inter-
national Trade Commission. With him on the brief were
James M. Lyons, General Counsel, and NEAL J.
REYNOLDS, Assistant General Counsel.
JOSEPH W. DORN, King & Spalding LLP, of Washing-
ton, DC, argued for defendant-appellee Appleton Papers
Inc. With him on the brief were ASHLEY C. PARRISH and
STEVEN R. KEENER. Of counsel was GILBERT B. KAPLAN.
__________________________
Before RADER, Chief Judge, LINN and MOORE, Circuit
Judges.
PER CURIAM.
Papierfabrik August Koehler AG and Koehler Amer-
ica, Inc. (collectively “Koehler”) appeal the Court of Inter-
national Trade’s review of the International Trade
Commission’s (the “Commission”) determination that
Koehler’s dumping of Light Weight Thermal Paper
(“LWTP”) poses a threat of material injury to a domestic
industry. Due to the unique circumstances in this case,
this court vacates the judgment of the Court of Interna-
tional Trade and remands for further proceedings consis-
tent with this opinion.
3 PAPIERFABRIK AUGUST v. US
I.
Both Koehler and Appleton Papers Inc. (“Appleton”)
produce LWTP. LWTP is thin paper with a thermal
active coating, a mixture of dye and developer, that
changes color upon contact with heat. Printers with
LWTP are often used at point-of-sale locations. LWTP
products are classified by weight, measured in grams per
square meter (“gsm”), and roll type, produced in jumbo or
slit rolls.
Appleton filed a petition on behalf of the domestic
LWTP industry with the Commission and United States
Department of Commerce (“Commerce”) alleging that
imports of Koehler’s LWTP from Germany (and other
imports from China and Korea) were being sold at less
than fair value (“LTFV”) and causing injury, or threaten-
ing to cause injury, to the domestic LWTP industry. In
response to Appleton’s petition, the Commission and
Commerce jointly commenced an investigation to deter-
mine whether the domestic LWTP industry was materi-
ally injured or threatened with material injury due to the
allegedly dumped LWTP imports.
The Commission is statutorily required to make the
final dumping determination. In relevant part, 19 U.S.C.
§ 1673d(b)(1) provides:
The Commission shall make a final determination
of whether–
(A) an industry in the United States –
(i) is materially injured, or
(ii) is threatened with material injury, or
(B) the establishment of an industry in the United
States is materially retarded,
PAPIERFABRIK AUGUST v. US 4
by reason of imports, or sales (or the likelihood of
sales) for importation, of the merchandise with re-
spect to which the administering authority has
made an affirmative determination under subsec-
tion (a)(1) of this section. If the Commission de-
termines that imports of the subject merchandise
are negligible, the investigation shall be termi-
nated.
(emphasis added). The “administering authority” is the
Secretary of Commerce, 19 U.S.C. § 1677(1). 19 U.S.C. §
1673d(a)(1) requires Commerce to make “a final determi-
nation of whether the subject merchandise is being, or
likely to be, sold in the Untied States at less than its fair
value [(is being dumped)].” This dumping margin deter-
mination appears as a weighted-average dumping margin
of all products within the subject merchandise sold by a
party.
When making a final determination, Commerce uses
“the dumping margin or margins most recently published
by [Commerce] prior to the closing of the Commission’s
administrative record.” 19 U.S.C. § 1677(35)(C)(ii). How-
ever, when Commerce makes a positive dumping deter-
mination, they “shall [also] make available to the
Commission all information upon which such determina-
tion was based and which the Commission considers
relevant to its determination.” 19 U.S.C. § 1673d(c)(1)(A).
In this investigation, Commerce defined the LWTP
subject merchandise as “thermal paper with a basis
weight of 70 [gsm] (with a tolerance of + 4.0 [gsm]) or
less . . .” The Federal Register carried this determination
on October 2, 2008. As printed in the Federal Register,
Commerce found that imports of the subject merchandise
from Koehler were being dumped at a margin of 6.50
5 PAPIERFABRIK AUGUST v. US
percent. Commerce analyzed seven of Koehler’s LWTP
products, distinguished by weight.
Commerce also found that six of the seven Koehler
products had positive dumping margins—meaning they
are being sold at LTFV. As calculated by Commerce, and
reflected in Commerce’s intermediate calculations, the
only Koehler product without a positive dumping margin
was Koehler’s 48 gsm LWTP product. The 48 gsm prod-
uct constituted 38.15 percent of Kohler’s quantity of sales
in the United States and made up 40.28 percent of the
value of sales in the United States.
Commerce often attempts to separate products from
the subject merchandise; however, Koehler’s 48 gsm
LWTP allegedly was not physically distinct enough to
become a separate class or kind for Commerce’s determi-
nation of the subject merchandise.
The Commission’s threat-of-injury investigation found
that the bulk of LWTP sold in the United States was 48
gsm or 55 gsm. The Commission further found that U.S.
shipments of the 55 gsm rolls from Koehler declined from
2005 to 2007, and that imports of the 48 gsm rolls, the
product not sold at LTFV, were increasing. The Commis-
sion observed that the 48 gsm imports from Koehler were
products “not consistently offered by the domestic indus-
try, [but] by interim 2008 the domestic industry was
increasingly selling 48 gram jumbo rolls.”
Before publication of the Commission’s final investi-
gation, Koheler requested that the Commission disregard
the increased shipments of 48 gsm jumbo rolls because
they were the one product without a positive dumping
margin. Citing this court’s decision in Algoma Steel Corp.
v. United States, 865 F.2d 240 (Fed. Cir. 1989), the Com-
mission declined to disturb Commerce’s dumping margin
calculations by considering intermediate individual
PAPIERFABRIK AUGUST v. US 6
product dumping margin calculations. Specifically, the
Commission refused to examine any dumping margins of
the 48 gsm rolls that were not published in the Federal
Register.
The Commission published its final investigation de-
terminations in November 2008. Certain Lightweight
Thermal Paper from China and Germany, 73 Fed. Reg.
70,367 (Int’l Trade Comm’n Nov. 20, 2008) (final determ.).
The Commission found, in a 3-3 split decision, that the
domestic LWTP paper industry was “threatened with
material injury by reason of subject imports from Ger-
many.” The Commission’s determination was almost
entirely based on the impact 48 gsm German jumbo rolls
will have on the domestic market.
The Commission determined that increased imports of
48 gsm jumbo rolls from Germany threatened the domes-
tic LWTP industry with material injury even though
those rolls were not being sold at LTFV. In their final
investigation, the Commission predicted that “[w]hile
most of the subject imports from Germany during the
period of investigation were 55 [gsm] jumbo rolls . . .
imports entering in the imminent future will be heavily
concentrated in the 48 [gsm] product. . . . [and the 48 gsm
rolls] will have far greater significance in the imminent
future.” Among other effects, the Commission predicted
that “48 gram product will restrict the ability of domestic
producers to adjust prices of 55 gram products commen-
surately with costs.” The Commission concluded that the
only threat of material injury came from the 48 gsm rolls
that were not being sold at LTFV.
The Court of International Trade affirmed the Com-
mission’s determination; Koehler timely appealed to this
court. This court has jurisdiction under 28 U.S.C.
§ 1295(a)(5).
7 PAPIERFABRIK AUGUST v. US
II.
This court reviews the Court of International Trade’s
decision without deference, and reviews the Commission’s
decision for factual determinations “unsupported by
substantial evidence on the record or otherwise not in
accordance with law.” 19 U.S.C. § 156a(b)(1)(B)(i); see also
Allegheny Ludlum Corp. v. United States, 287 F.3d 1365,
1369 (Fed. Cir. 2002). This court reviews the Commis-
sion’s legal conclusions without deference. U.S. Steel Grp.
v. United States, 96 F.3d 1352, 1356 (Fed. Cir. 1996).
The Commission cannot change Commerce’s determi-
nation that, on average, all of Koehler’s exports within the
subject merchandise is being dumped at a rate of 6.50
percent. See 19 U.S.C. § 1677(35)(C)(ii). However, the
Commission can examine the intermediate calculations
relied upon by Commerce. See 19 U.S.C. § 1673d(c)(1)(A).
As such, the Commission is not prohibited from using and
considering intermediate calculations, provided by Com-
merce, when making an injury determination.
Moreover the Commission may also consider subsets
of the subject merchandise. See Cleo Inc. v. United States,
501 F.3d 1291, 1295 (Fed. Cir. 2007) (citing 19 U.S.C. §§
1673, 1677(4)(A), and 1677(10) as support for the Com-
mission’s authority to determine which parts of the sub-
ject merchandise are relevant for the industries in the
injury determination). Accordingly, Commerce’s designa-
tion of the class or kind of merchandise sold at LTFV does
not necessarily control the group of products used by the
Commission in its material injury analysis. Id. (citing
Hosiden Corp. v. Advanced Display Mfrs. of Am., 85 F.3d
1561, 1568 (Fed. Cir. 1996)). Indeed, the Commission,
and not Commerce, determines whether all articles in the
subject merchandise are “like products,” which in turn
PAPIERFABRIK AUGUST v. US 8
make up an “industry” for the purposes of a dumping
determination. Cleo, 501 F.3d at 1295.
The Commission’s six-element “like product” test sup-
ports the Commission’s ability to examine the price of
subsets of the subject merchandise. Indeed, one of the six
elements of the Commission’s “like product” determina-
tion is price. Id. (citing Torrington Co. v. United States,
938 F.2d 1278, 1280 (Fed. Cir. 1991)). This like-product
determination demonstrates the Commission’s ability to
manipulate and subjectively evaluate parts of Commerce’s
dumping margin determination, including evaluating the
underlying prices products are sold at, without changing
the dumping margin calculation used.
Koehler asked the Commission to take into account
sale prices for the 48 gsm products, in the form of inter-
mediate dumping margin calculations. Koehler used this
court’s opinion in Algoma Steel Corp. v. United States, 865
F.2d 240 (Fed. Cir. 1989) to support its request. The
Commission’s refusal to consider intermediate 48 gsm
dumping margin calculations was premised on a diver-
gent reading of Algoma, and a misunderstanding of
Koehler’s request.
The Commission must use the dumping margins cal-
culated by Commerce. 19 U.S.C. § 1673d(b)(1). However,
Algoma specifically allows for consideration of raw data in
computer print outs “by reasons specific to the particular
case, why sales at MTFV were not relevant to the injury
determination.” Algoma, 865 F.2d at 242. Koehler’s
situation is one of those “particular cases.” Id.Several important factors lead to this conclusion.
First, Koehler has not asked the Commission to change
any dumping margin calculations made by Commerce.
Instead, Koehler asks the Commission to make decisions
based on the price, measured as a dumping margin, of a
9 PAPIERFABRIK AUGUST v. US
subset of dumped goods. Second, Koehler asks the Com-
mission to analyze data that is statutorily required to be
available to the Commission. See 19 U.S.C. §
1673(d)(c)(1)(A). Thoughtful consideration of this data, in
the context of the injury determination by the Commis-
sion, has no effect on the dumping margin calculations
published by Commerce. Instead, it allows the Commis-
sion to take those calculations and apply its expertise to
make a fair and equitable injury determination. When
the threat determination is based almost exclusively on
one product within the subject merchandise, and that one
product is not being sold at LTFV, the Commission should
be able to use all materials at its disposal to make an
equitable determination. The Commission incorrectly
denied Koehler’s request, and incorrectly interpreted this
court’s holding in Algoma, when refusing to consider
potentially dispositive intermediate data. To that end,
the Court of International Trade erred in affirming the
Commissions decision.
Accordingly, this court vacates the judgment of the
Court of International Trade and remands with instruc-
tions to remand this case to the Commission for reconsid-
eration.
VACATED AND REMANDED
COSTS
No costs.