Hosiden Corp. v. Advanced Display Manufacturers of America
Docket: No. 94-1380
Court: Court of Appeals for the Federal Circuit; May 31, 1996; Federal Appellate Court
Pauline Newman, Circuit Judge, addresses an appeal by the Advanced Display Manufacturers of America (ADMA) concerning an antidumping duty case related to high-information content flat panel displays (HIC FPDs). The International Trade Commission (ITC) decided to cumulate the effects of sales at less than fair value (LTFV) for various electronic forms of HIC FPDs, considering the domestic industry to encompass all HIC FPD producers. The United States Court of International Trade disagreed, asserting that the ITC should perform separate injury analyses for each form of HIC FPD. However, the appellate court found that the ITC acted within its authority by defining the domestic 'like product' as HIC FPDs generally and correctly assessed the cumulative injury from LTFV sales across different forms. Thus, the lower court erred in restricting the ITC's methodology.
The background reveals that on July 18, 1990, ADMA and its associated companies filed an antidumping duty petition against imports from Japan, asserting these were sold at LTFV and harmed the U.S. industry. The ITA and the Commission initiated investigations accordingly. The Commission determined the domestic industry by evaluating similarities in physical characteristics, end uses, production processes, and distribution channels, concluding that the domestic industry was indeed injured due to LTFV sales of HIC FPDs.
In its preliminary determination, the Commission identified HIC FPDs and their subassemblies as the domestic 'like product' and indicated reasonable evidence of injury. The Commerce Department, in a preliminary ruling, classified HIC FPDs into a single 'class or kind' based on shared characteristics. Upon final determination, Commerce recognized four distinct classes of HIC FPDs: active-matrix liquid crystal display, passive-matrix liquid crystal display, gas plasma display, and electroluminescent display. It found that active-matrix and electroluminescent displays were sold at LTFV while excluding passive-matrix displays due to lack of domestic production and gas plasma displays due to minimal dumping margins. The calculated dumping margins were 7.02% for electroluminescent and 62.67% for active-matrix HIC FPDs.
The Commission determined that the 'like product' for the domestic industry was High-Information Content Flat Panel Displays (HIC FPDs), encompassing various electronic forms of these displays. Following the statutory definition under 19 U.S.C. 1677(10), the Commission concluded that all HIC FPDs share similar characteristics and uses, primarily providing continuous visible displays of text, images, and graphics. They share distribution channels, typically being sold to original equipment manufacturers and produced in sterile environments. Purchasers indicated they would consider multiple types of HIC FPDs when making purchases, and there was significant price overlap among them.
The Commission recognized the delineation of four types of HIC FPDs by the Department of Commerce but clarified that its definition of 'like product' for injury assessment does not have to align precisely with Commerce’s classification. It stated that its findings could encompass a broader category than Commerce’s determinations. The Commission found that the domestic industry producing HIC FPDs experienced material injury from cumulative imports sold at less than fair value (LTFV) of active-matrix and electroluminescent displays, leading to the imposition of anti-dumping duties.
Subsequently, Japanese manufacturers and certain domestic importers challenged these antidumping duty orders in the Court of International Trade. They contended that the Commission wrongly conducted a combined injury investigation for both active-matrix and electroluminescent HIC FPDs. The court agreed, ruling that the Commission was required to perform separate injury analyses for each form of HIC FPD. It mandated the identification of domestic producers of like products corresponding to imported active-matrix and electroluminescent FPDs, assessing whether each domestic industry was individually injured by imports of those specific products.
ADMA and the Commission appealed a ruling to the court, but their appeals were dismissed as premature, referencing Hosiden Corp. v. Advanced Display Manufacturers of America. The court found the remand order from the Court of International Trade was not a final disposition. The Commission conducted separate injury determinations as ordered, although it disagreed with the court's conclusion regarding the cumulation of impacts from multiple classes of merchandise. A commissioner articulated that the Commission has the discretion to cumulate classes of merchandise, expressing concern over the court's lack of deference to this authority.
In applying the court's methodology, three commissioners identified one like product across two classes of merchandise, while the other three restricted the definition to only the electronic forms of the imported products. Four commissioners determined that imports of electroluminescent HIC FPDs did not cause material injury to the domestic industry. The Commission was evenly split on the injury determination for active-matrix HIC FPDs, resulting in an affirmative finding. Following a statement of no interest from the sole domestic producer, the antidumping duty order on active-matrix HIC FPDs was retroactively revoked.
On appeal to the Court of International Trade, ADMA contended that the court's remand instructions were legally incorrect, but the court upheld the Commission's findings as compliant with its directives and supported by substantial evidence. The court instructed Commerce to revoke the remaining antidumping duty order within ten days. In a subsequent appeal to the Federal Circuit, ADMA argued that the Commission's definition of the domestic industry was lawful and within its discretionary authority to conduct a cumulative injury analysis for the various forms of HIC FPDs.
ADMA contends that the Court of International Trade incorrectly instructed the Commission regarding the requirement for separate injury determinations for each electronic form of HIC FPD. The United States supports this view, asserting that the court should have deferred to the Commission’s decision to cumulate injury assessments for these forms and argues that the appeal is moot due to the revocation of the active-matrix HIC FPD antidumping duty order. Sharp Corporation, while agreeing the appeal is moot, maintains that prior decisions (Hosiden I and Hosiden II) should not be vacated and, if not moot, should be affirmed, additionally contesting ADMA's standing in the appeal. A previous ruling established ADMA's standing.
The court addresses mootness by examining whether a live controversy exists. A case is deemed moot when issues are no longer relevant or the parties have no legal interest in the outcome. The government argues that, following the revocation of the antidumping order, only one type of HIC FPD, the electroluminescent form, remains subject to duties, making the appeal irrelevant. However, ADMA argues that the court's ruling on the necessity of separate injury determinations could still affect the parties, particularly regarding the imposition of antidumping duties on electroluminescent HIC FPDs.
The document then transitions to evaluate whether the Court of International Trade correctly prohibited the Commission from cumulating the injurious effects of the various electronic forms of HIC FPD. The court's review of statutory interpretation is plenary, and if the statute lacks clarity, it must determine if the agency's interpretation is permissible.
Under 19 U.S.C. 1673, anti-dumping duties are imposed if: (1) the relevant authority finds that foreign merchandise is being sold in the U.S. at less than fair value, and (2) the Commission determines that a U.S. industry is materially injured or threatened by these imports, or that the establishment of such an industry is materially hindered. The amount of the duty equals the difference between the foreign market value and the U.S. price of the merchandise. The term 'industry' is defined in 19 U.S.C. 1677(4)(A) as producers of a domestic like product or those whose collective output is a significant portion of total domestic production.
The statute mandates proof of both sales at less than fair value and injury to domestic industry. Courts have established that determinations of 'class or kind' and 'like product' are distinct; for instance, the Commission may identify multiple 'like products' corresponding to fewer 'classes or kinds' of merchandise. The Federal Circuit has affirmed that the Commission has discretionary authority over defining like products in antidumping investigations.
Furthermore, the relationship between the International Trade Administration (ITA) and the Commission is characterized by a division of responsibilities, which has been upheld even when their findings appear inconsistent. Courts have emphasized that this division is essential to the statutory framework and that the resolution of issues between these agencies should not be dictated by the courts. This separation of duties allows for a nuanced approach to addressing anti-dumping cases, as seen in several cited cases.
Coterminous decisions by the ITC and ITA are beneficial for administrative ease, but they are separate and based on distinct criteria. The Commission appropriately defined the domestic industry by including all electronic forms of HIC FPDs under the "like product" standard. It interpreted the statute to allow for the cumulative assessment of injurious effects from LTFV imports on the domestic industry. The statute mandates the Commission to consider import volume, price effects on like products, and the impact on domestic producers, without requiring separate injury analyses when one domestic industry corresponds to multiple classes of goods. Historical cases demonstrate that the Commission has effectively performed single injury analyses while recognizing multiple classes or kinds of imports, ensuring that individual dumping margins are maintained. The cumulation statute supports assessing the collective volume and price effects of imports when they compete in the U.S. market, aligning with the objective to prevent negative injury determinations due to combined unfair trade practices.
In Bingham, Taylor Div. Virginia Indus. Inc. v. United States, the court interpreted the legislative history of 19 U.S.C. 1677(7)(G)(i) to mandate the cumulation of effects from both dumped and subsidized imports. The court referenced a House Report emphasizing the need to prevent material injury from multiple unfair practices. It affirmed that the Commission is allowed to reflect the cumulative injury in its analysis, as importers consider the overall industry conditions. The Commission can combine the effects of dumped imports from various countries or both dumped and subsidized imports. The court criticized the Court of International Trade for incorrectly ruling that the Commission could not cumulate the injurious effects of different electronic forms of HIC FPD. It concluded that the Commission's interpretation and application of the statute regarding the cumulation of injury from multiple import classes was reasonable. The decision of the Court of International Trade was vacated and remanded for further proceedings. Additionally, it noted that the antidumping law had been amended by the Uruguay Round Agreements Act, which changed relevant terminology regarding domestic products and subject merchandise.
