Rail Coupler Importer Challenges ITC's 'Failure' to Reconcile Findings in 2 Injury Cases

Importer Amsted Rail Co. argued at the Court of International Trade that the International Trade Commission failed to reconcile its "contradictory conclusions" on the same evidence in finding that the domestic industry was harmed by imports of freight rail couplers. Filing a motion for judgment on Sept. 6, ARC said that didn't account for a key finding in a previous investigation on the freight rail couplers, which said that the domestic industry's health is "disproportionately" tied to demand for the couplers in the original equipment manufacturer market segment (Amsted Rail Co. v. United States, CIT # 23-00268).

This market segment was in decline in 2019-21 due to "slumping railcar demand," though demand "rose sharply in 2022." Instead of addressing this "critical condition of competition" as an "alternative explanation for the sharp improvement in the industry's condition in 2022, the Commission brushed aside the improvement" in this segment and looked instead to the "replacement market segment," ARC said. The result is an injury finding unsupported by substantial evidence, the company argued.

ARC's case contests the ITC's affirmative injury finding on freight rail couplers from China, which came just under a year after the commission said freight rail couplers from China didn't injure the U.S. market. A separate case from importers Wabtec Corp. and Strato was also filed against the injury finding, though its action centers on the ITC's decision to start the investigation so soon after issuing a negative injury decision (see 2408200046).

ARC argued that the ITC failed to reconcile its conclusions in the first proceeding with its decision in the second. In the first, the commission said the domestic industry performance increased during the 2020-22 investigation period though there were declines in 2020-21. The ITC discounted the rebound in 2022 based on the theory that the improvements were due to provisional duties being imposed during the first investigation.

The importer argued that the ITC ignored key findings from the first investigation, which said that the domestic industry's health is greatly tied to demand in the original equipment manufacturer market, which was in decline 2019-21. ARC argued that there's "nothing but speculation" to support the "theory of the Commission plurality that improvements in the condition of the domestic industry in 2022 could be written off as due solely to imposition of provisional duties in" the first proceeding. The numbers show that U.S. production didn't take off after the imposition of preliminary duties but after the ITC made its negative determination and lifted duties, the brief said.

ARC also railed against the ITC's decision to include an unnamed party as part of the domestic industry, arguing that the statute and legislative history require the exclusion of domestic producers whose interests in import cases causes them to act against the domestic industry.

Lastly, the importer fleshed outs its claim that its former counsel, Daniel Pickard at Buchanan Ingersoll, who now serves as counsel for a petitioner in the proceeding, had a conflict of interest in the proceeding. ARC alleges that Pickard used the company's information against it after joining a new law firm and representing another party in the proceeding (see 2211160057). The importer alleged that Pickard altered the AD petition on freight rail couplers using ARC's information to achieve a better result for the new client.

The motion for judgment said the ITC's failure to investigate "a disabling conflict of interest" by Pickard was illegal. While the commission said it didn't have authority to resolve conflicts of interest, it has done so in other proceedings based on its "inherent authority to control proceedings," the brief said.

The failure to resolve the issue "taints these proceedings, and the Court should remedy that failure here by remanding and requiring the Commission to either dismiss the investigation or enter a final negative determination," ARC argued.