Federal Circuit Upholds ITC's Negative Injury Finding on Structural Steel From China

The International Trade Commission did not err by declining to resolve an alleged ambiguity in the definition of the domestic like product scope as part of an antidumping duty injury investigation on fabricated structural steel from China, the U.S. Court of Appeals for the Federal Circuit ruled. Upholding the commission's negative injury finding, Judges Jimmie Reyna, William Bryson and Tiffany Cunningham said that nothing in the record showed that the ITC declined to address the issue, as claimed by the Full Member Subgroup of the American Institute of Steel Construction (AISC).

The appellate court also said that the commission didn't violate the law by deciding that the captive production exception isn't applicable and finding that there were no significant price effects from the fabricated structural steel imports.

The steel institute claimed that the ITC is "legally obligated to redefine the like product definition whenever a dispute arises" on whether a good meets the domestic like product definition, adding that the commission must state a reason why any disputed product does or doesn't sit under the domestic like product scope. The judges absolved the ITC of this duty, finding as a matter of law that no such obligation exists.

AISC raised the issue as part of its argument that the ITC included certain data in its investigation related to products that didn't meet the domestic like product definition. Namely, data from U.S. companies NCI Group and BlueScope Buildings North America that included information on pre-engineered metal building systems (PEMBs). The steel institute said that the companies had data on complete PEMBs, which are "expressly out-of-scope." The Federal Circuit held that the "record belies AISC's argument."

The judges disagreed with the steel institute's premise, which equates complete PEMBs with PEMB kits. The ITC expressly said that PEMB kits are in scope and permissibly included in NCI's and BlueScope's data, while holding that complete PEMBs are out-of-scope.

During the proceeding, AISC said the scope was not meant to cover "only [fabricated structural steel] that becomes the structure" or that is "essential to support the design loads of the structure." Per AISC's request, ITC defined the domestic like product in the same way Commerce defined the scope, leading the court to say the scope decision was supported by substantial evidence.

The judges also sustained the government's claim that the ITC didn't consider out-of-scope data, finding the ITC's review to be "thorough." The domestic like product analysis also was deemed legal by the court, since the commission carried out a proper six-factor test to see if subject fabricated structural steel corresponds to a single domestic like product or mulitple. The ITC legally found that full PEMBs are not in scope but that PEMB kits are part of the scope.

AISC went on to argue that the ITC erred in finding that the captive production provision was inapplicable. The petitioner alleged that the provision applies since PEMB makers internally transferred significant quantities of fabricated structural steel to make PEMBs, which are downstream articles. The court noted that this provision addresses situations where U.S. producers internally transfer a significant volume of the domestic like product for further internal processing into a separate, distinct downstream article.

As a result, the provision doesn't apply where both the domestic like product and the purported downstream article both fall within the domestic like product scope, the court said. The ITC correctly identified that the provision doesn't apply in this case since complete PEMBs are fully assembled out-of-scope buildings, while the kits with fabricated structural steel parts fall within the products' scope.

Reyna, the opinion's author, lastly addressed the imports' price effects. AISC claimed that the ITC erred in not saying that the Chinese fabricated structural steel imports were significantly undersold or depressed the prices of the domestic like product, since the commission should have compared the initial and final itemized bid data from buyers and producers instead of using fabricated structural steel pricing data.

The judges said the price effects analysis was reasonable and backed by substantial evidence. "After considering product data, overall bid data, itemized bid data, AUV data, and lost sales, the Commission determined that '[t]he record consequently does not support a finding that the subject imports significantly undersold the domestic like product,'" the opinion said. The commission satisfied its obligation, as laid out in its regulations, to "conduct investigative activities and to collect data necessary to conduct its analysis."

(Full Member Subgroup of the American Institute of Steel Construction v. United States, Fed. Cir. # 22-1176, dated 09/07/23; Judges: Jimmie Reyna, William Bryson, Tiffany Cunningham; Attorneys: Thomas Johnson of Wiley Rein for plaintiff-appellant American Institute of Steel Construction; John Henderson for defendant-appellee U.S. government; Daniel Witkowski of Akin Gump for defendant-appellees led by Cornerstone Building Brands; Daniel Porter of Curtis Mallet-Prevost for defendant-appellee BlueScope Buildings North America; Ned Marshak of Grunfeld Desiderio for defendants-appellees led by Jinhuan Construction Group Co.)