Hosiden Corporation, Hitachi, Ltd., Matsushita Electric Industrial Corporation, Apple Computer, Inc., International Business MacHines Corporation, Compaq Computer Corporation, Tandy Corporation, and Sharp Corporation v. Advanced Display Manufacturers of America, and Planar Systems, Inc., Plasmaco, Inc., Ois Optical Imaging Systems, Inc., Cherry Display Products Corporation, Electro-Plasma Inc., Photonics Technology, Inc., and Magnascreen Corporation, and Texas Instruments, Incorporated v. The United States, Advanced Display Manufacturers of America, and Planar Systems, Inc., Plasmaco, Inc., Ois Optical Imaging Systems, Inc., Cherry Display Products Corporation, Electro-Plasma Inc., Photonics Technology, Inc., and Magnascreen Corporation v. United States
Docket: 94-1380
Court: Court of Appeals for the Federal Circuit; May 31, 1996; Federal Appellate Court
In the case of Advanced Display Manufacturers of America (ADMA) v. The United States, the United States Court of Appeals for the Federal Circuit addressed an appeal concerning antidumping duties on imports of high-information content flat panel displays (HIC FPDs). The core issue was the methodology used by the International Trade Commission (ITC) to assess injury to the domestic industry from imports sold at less than fair value (LTFV). The ITC had combined the effects of various electronic forms of HIC FPDs, viewing them as a single 'like product' for analysis. The Court of International Trade disagreed, requiring separate injury analyses for each form of HIC FPD. The appellate court, however, upheld the ITC's approach, affirming that the Commission acted within its statutory authority by treating HIC FPDs collectively and correctly determining the cumulative impact of LTFV sales. The background of the case involves a petition filed by ADMA and its members in July 1990, alleging that Japanese imports of HIC FPDs were sold below fair value, harming the U.S. industry, which prompted investigations by the International Trade Administration and the ITC.
The Commission is tasked with identifying domestic industries harmed by imports sold at less than fair value (LTFV), as outlined in 19 U.S.C. §§ 1673b(a)(1), 1673d(b)(1), and 1677(4)(A). In its preliminary assessment, the Commission defined the domestic 'like product' as High-Information Content Flat Panel Displays (HIC FPDs) and their subassemblies, concluding that the domestic industry was reasonably injured by Japanese imports sold at LTFV, leading to a preliminary affirmative injury determination.
The Department of Commerce, in its preliminary decision, classified various electronic forms of HIC FPDs and their subassemblies as a single category based on shared physical characteristics, customer expectations, end uses, and distribution channels, confirming that these products were sold in the U.S. at LTFV. In its final determination, Commerce identified four distinct classes of HIC FPDs: active-matrix liquid crystal displays, passive-matrix liquid crystal displays, gas plasma displays, and electroluminescent displays. It found that imports of active-matrix and electroluminescent displays were sold at LTFV, while passive-matrix displays were excluded from the investigation due to lack of domestic production, and gas plasma displays were dismissed due to negligible dumping margins. Commerce calculated weighted average dumping margins of 7.02% for electroluminescent displays and 62.67% for active-matrix displays.
Upon returning to the Commission for a final injury determination, it reaffirmed that the 'like product' encompassed all forms of HIC FPDs, applying the statutory definition that emphasizes similarity in characteristics and uses. The Commission noted that all HIC FPDs serve the common function of providing visible displays and share similar distribution channels, being mainly sold to original equipment manufacturers. It concluded that purchasers tend to consider multiple types of HIC FPDs when making decisions, with significant price overlap among them, thus confirming the appropriateness of defining a single 'like product' for all HIC FPDs.
The Commission acknowledged Commerce's classification of High Information Content Flat Panel Displays (HIC FPD) into four categories but clarified that the domestic 'like product' for injury assessment might not align with Commerce's 'class or kind' determination. The Commission has the authority to define a 'like product' that could be wider or consist of multiple products compared to the imported classes identified by Commerce. It found that the domestic HIC FPD industry suffered material injury from cumulative imports of active-matrix and electroluminescent displays sold at less than fair value (LTFV), resulting in the imposition of antidumping duties.
In the subsequent legal challenge by Japanese manufacturers and domestic importers in the Court of International Trade, the court ruled that the Commission failed to conduct separate injury analyses for each HIC FPD type. It mandated the Commission to separately identify the domestic industries for active-matrix and electroluminescent displays and assess the individual injuries caused by each. The court's rationale was that treating these as a single class undermined Commerce's classification.
On remand, the Commission performed the required separate injury assessments but expressed disagreement with the court's directive, asserting its discretion to cumulatively evaluate the impacts of different classes of merchandise when the like product and domestic industry are the same. The Commission cited statutory provisions supporting its approach and criticized the court's refusal to recognize its discretionary authority.
Three of the six commissioners at the Court of International Trade determined that a single like product includes all HIC FPDs for the investigated merchandise classes, while the other three limited the domestic like product to the same electronic form as the imports. Four commissioners concluded that imports of electroluminescent HIC FPDs did not materially injure the domestic industry, defined variably as either all HIC FPDs or solely electroluminescent HIC FPDs. A 3-3 split among commissioners regarding active-matrix HIC FPDs resulted in an affirmative injury determination due to the tie-breaking rule stipulated in 19 U.S.C. 1677(11). However, in June 1993, the sole domestic producer of active-matrix HIC FPDs, Optical Imaging Systems, withdrew interest, leading to the retroactive revocation of the antidumping duty order.
On appeal by ADMA to the Court of International Trade, the court upheld the Commission’s remand determination, finding it legally sound and supported by substantial evidence. The court also instructed Commerce to revoke the remaining antidumping duty order within 10 days of its judgment. ADMA subsequently appealed to the Federal Circuit, arguing that the Commission’s definition of the domestic industry was appropriate and fell within its discretionary authority to conduct a cumulative injury analysis. The United States contended that the Court of International Trade incorrectly required separate injury determinations for each electronic form of HIC FPD and asserted that the appeal was moot, calling for dismissal and vacating of the lower court's decisions. Sharp Corporation, as an appellee, supported the government’s position on mootness but argued against vacating previous decisions and challenged ADMA's standing in the appeal, a matter previously resolved by the court.
A case becomes moot when issues are no longer active or the parties lack a legal interest in the outcome. This determination involves assessing whether a decision would affect the parties and if the issue falls within the court's discretion. The government contends that the revocation of the antidumping duty order, due to the withdrawal of a complainant, has rendered the appeal moot since only one type of merchandise is subject to duties. Thus, they argue, any possible errors in prior decisions are now irrelevant.
Conversely, ADMA asserts that the Court of International Trade's requirement for separate injury determinations for different electronic forms of HIC FPD affects the parties. If the court's requirement is deemed improper, it could lead to reinstating the Commission’s finding of injury from combined products, resulting in potential antidumping duties on electroluminescent HIC FPDs. This indicates that an actual controversy persists.
The document then addresses whether the Court of International Trade correctly prevented the Commission from cumulating the injurious impact of different forms of HIC FPD. The standard for reviewing statutory interpretation is plenary, and if a statute is ambiguous, the agency's interpretation is permissible if it reasonably constructs the statute. The imposition of antidumping duties is contingent upon a determination that foreign merchandise is sold at less than fair value and that such sales materially injure or threaten to injure a domestic industry.
The term 'industry' refers to all producers of a domestic like product or those whose combined output significantly contributes to total domestic production. The antidumping statute requires proof of sales at less than fair value (LTFV) and injury to the domestic industry. Courts have established that determinations regarding 'class or kind' of merchandise and 'like products' do not need to be consistent. The International Trade Commission (ITC) and the Department of Commerce (Commerce) operate under separate but related responsibilities, with the ITC having the discretion to define the injured like products in antidumping investigations. There can be multiple 'like products' corresponding to a single class of merchandise. The courts have upheld that the ITC's findings need not align with Commerce's product classifications. In the Algoma Steel case, the division of responsibility between the ITC and Commerce was emphasized, noting that inconsistent findings are permissible. The courts have reiterated that the resolution of these relationships is primarily for the agencies, not the judiciary. The ITC appropriately defined the like product to encompass all electronic forms of HIC FPDs and correctly interpreted the statute to assess cumulative injury from LTFV imports on the domestic industry.
The statute provides clear guidelines for the Commission to assess the impact of imports sold at less than fair value (LTFV) on the domestic industry. Specifically, it mandates an evaluation of import volume, price effects, and the impact on domestic producers within the U.S. The statute does not require separate injury analyses if only one domestic industry exists for the goods being investigated. Historical precedents, such as the cases involving isocyanurates and carbon steel plate, demonstrate that the Commission has previously conducted a single injury analysis when multiple classes of imports correspond to a single like product. This practice aligns with the cumulation policy outlined in 19 U.S.C. 1677(7)(G)(i), which allows for the cumulative assessment of volume and price effects of various imports competing in the U.S. market. The purpose of this cumulation is to prevent negative injury determinations that could arise from the collective impact of unfairly traded imports. Courts have interpreted this legislative intent to require the cumulation of effects from both dumped and subsidized imports to safeguard against material injury from multiple unfair practices.
The Commission is permitted to account for the cumulative injury caused by dumped imports, as importers must navigate the existing conditions of the domestic industry. It can aggregate the impacts of dumped imports from various countries, or both dumped and subsidized imports, when assessing whether sales at less than fair value (LTFV) have inflicted material injury on the domestic industry. The Commission is not constrained by arbitrary distinctions that could obscure the actual injury experienced by the domestic industry. Aggregating the injury from different types of imports that compete with the same domestic product accurately reflects the extent of harm. The Court of International Trade incorrectly concluded that the Commission could not combine the injury assessments from multiple electronic forms of HIC flat panel displays (FPDs). The Commission's interpretation and application of the statute to cumulate the effects of HIC FPD sales at LTFV were reasonable. Consequently, the Court's decision is vacated and remanded for further proceedings.
