ITC Finding That Omani PET Sheet Damaged US Injury Sustained by CIT

The International Trade Commission properly found that imports of polyethylene terephthalate (PET) sheet from Oman injured the U.S. domestic industry, the Court of International Trade said in a Sept. 30 opinion made public Oct. 8. Addressing multiple challenges from the sole Omani exporter of PET sheet, OCTAL Inc., Judge Timothy Reif held that the ITC made all of its determinations in line with the governing statutes and with substantial evidence.

OCTAL argued that the commission did not properly find that the volume of OCTAL's imports was "significant." The exporter claimed that the ITC's finding that the volume of the imports was significant may not be based on volume alone since the commission did not take into account other reasons that the imports increased. The Justice Department countered by arguing that the plaintiffs were seeking to "rewrite the statute" to mandate that the effects of subject imports be considered in evaluating the volume of the imports.

However, the statute bifurcates the imports' volume and their impact in an injury determination, as CIT has repeatedly held, Reif said. "[T]he statute does not require that the Commission consider the effects of subject imports in its volume analysis," the opinion said. "In fact, the statute instructs that a finding that the volume of imports is 'significant' may be based on increased volume alone because the statute allows for a determination based on 'absolute terms.'" With that in mind, Reif also held that the ITC's conclusion that the volume of imports is significant was reasonable since the volume of imports increased in absolute terms and in relative terms to the production or consumption in the U.S.

OCTAL also challenged the ITC's finding of significant adverse price effects. OCTAL said that the commission found these adverse effects based solely on price underselling while ignoring evidence about price depression and suppression.

But, Reif cited court precedent in finding that the underselling analysis and the suppression and price depression analysis are two "statutorily-mandated discrete inquiries." The commission can rely on evidence of underselling or suppression and depression to back its adverse price effects finding, the judge said, citing CIT and U.S. Court of Appeals for the Federal Circuit opinions. However, the ITC is still required to consider both underselling and price suppression and depression, leading Reif to then rule on whether the adverse price effect finding based on underselling stands in light of the analysis for suppression and depression.

In fact, it does, Reif said. "The Commission considered price depression and suppression in its price effects analysis in the instant case," the opinion read. "The fact that the Commission did not find significant price depression or suppression does not mean that the Commission’s adverse price effects finding is unsupported by substantial evidence." OCTAL also tried to argue that other qualities of its exports drove purchasing patterns other than price, including the supposed superior quality of its product. But, the commission found price to be an important factor and that underselling caused injury to the domestic industry.

Turning generally to the question of whether the commission's significant adverse impact finding was backed by substantial evidence, the judge addressed OCTAL's arguments that the ITC didn't take factors into consideration that show positive gains by the domestic industry. "The Commission’s examination of the industry’s profitability trends taken in conjunction with the findings on industry declines in other areas, such as market share, shipments and capacity utilization, demonstrate that the Commission considered the range of industry performance data and made a reasonable impact determination," Reif said in response.

OCTAL also said that the ITC had to have evaluated the magnitude of the margins of dumping in assessing subject imports' impact. But, all the statute says is that the ITC has to "consider" the magnitude of the dumping margins, not reach a certain conclusion based on the magnitude of the margins. Since the ITC discussed the dumping margins primarily in two footnotes of its injury determination, it's off the hook, Reif said.

(OCTAL Inc., et al. v. United States, Slip Op. 21-133, CIT #20-03698, dated 09/30/21, Judge Timothy Reif. Attorneys: Daniel Porter of Curtis Mallet-Prevost for plaintiff OCTAL; Jason Miller for defendant U.S. government)