Nitrogen Solutions Fair Trade Committee v. United States

Slip Op. 05-13

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: HONORABLE RICHARD W. GOLDBERG, SENIOR JUDGE

NITROGEN SOLUTIONS FAIR TRADE

COMMITTEE,

Plaintiff,

v.

PUBLIC VERSION

UNITED STATES,

Court No. 03-00260

Defendant,

and

JSC NEVINNOMYSSKIJ AZOT INC.,

TRANSAMMONIA, INC. AND J.R.

SIMPLOT COMPANY,

Defendant-

Intervenors.

[ITC’s final negative injury and threat determination

sustained.]

Date: January 31, 2005

Akin, Gump, Strauss, Hauer & Feld, LLP (Valerie A. Slater

and Margaret Chisholm Marsh) for Plaintiff Nitrogen

Solutions Fair Trade Committee.

James Lyons, Acting General Counsel, U.S. International

Trade Commission (Michael Kenneth Haldenstein) for

Defendant United States.

White & Case, LLP (Walter J. Spak, Frank H. Morgan, and

Lyle B. Vander Schaaf) for Defendant-Intervenors JSC

Nevinnomysskij Azot Inc. and Transammonia, Inc.

Miller & Chevalier Chartered (Peter J. Koenig) for

Defendant-Intervenor J.R. Simplot Company.

Court No. 03-00260 Page 2

OPINION

GOLDBERG, Senior Judge: In this action, Plaintiff Nitrogen

Solutions Fair Trade Committee challenges the final

negative injury and threat determination of the United

States International Trade Commission (“ITC”) in the

antidumping proceedings involving Urea Ammonium Nitrate

Solutions from Belarus, Russia and Ukraine, 68 Fed. Reg.

18673 (Apr. 16, 2003) (“Notice of Determination”) and USITC

Pub. 3591, Inv. Nos. 731-TA-1006, 1008, and 1009 (Apr.

2003) (“Views of the Commission”) (together, the “Final

Determination”). Pursuant to USCIT Rule 56.2, Plaintiff

moves for judgment on the agency record.

For the reasons that follow, the Court sustains the

Final Determination.

I. BACKGROUND

Plaintiff is an association of domestic producers of

urea ammonium nitrate (“UAN”). Notice of Determination at

18674. UAN is a liquid nitrogen fertilizer used primarily

in the United States (“U.S.”) for row crops. Views of the

Commission at 5. It is a commodity product; UAN from

different sources (including imports) is commingled

throughout the distribution system. Id. at 14. Natural

gas is an important material input used to produce UAN,

Court No. 03-00260 Page 3

accounting for over half of its cost of production. Id.

In late 2000 and early 2001, natural gas prices in the U.S.

increased dramatically. Id. During this same period,

domestic UAN prices rose, domestic UAN consumption fell and

the volume of UAN imports to the U.S. increased. Id. at

13-16. In addition, the domestic UAN industry lost market

share and suffered financially. Id. at 25. Natural gas

prices began to normalize in mid 2001. Id. at 18. Imports

also began to decline, although remained at historically

high levels. Id.

On April 19, 2002, Plaintiff filed petitions with the

U.S. Department of Commerce and the ITC alleging that UAN

from Belarus, Lithuania, Russia and Ukraine was being sold

in the U.S. at less than fair value and was causing

material injury or threatening to cause material injury to

the domestic UAN industry. The ITC initiated an

antidumping investigation on that same day. 67 Fed. Reg.

20994 (Apr. 29, 2002). On June 4, 2002, the ITC issued a

unanimous affirmative preliminary injury and threat

determination as to UAN imports from Belarus, Russia and

Ukraine (the “subject imports”), and determined that

imports from Lithuania were negligible. Urea Ammonium

Nitrate Solutions from Belaus, Russia, and Ukraine, 67 Fed.

Reg. 39439 (June 7, 2002) and USITC Pub. 3517, Inv. Nos.

Court No. 03-00260 Page 4

731-TA-1006, 1008, and 1009 (June 2002) (“Preliminary Views

of the Commission”) (together, the “Preliminary

Determination”).

The ITC then commenced its final investigation. On

April 10, 2003, the ITC issued the Final Determination,

unanimously concluding that the domestic UAN industry was

not materially injured or threatened with material injury

by reason of the subject imports. Views of the Commission

at 34.

This appeal followed. The Court has subject matter

jurisdiction pursuant to 28 U.S.C. § 1581(c).

II. STANDARD OF REVIEW

The Court must sustain the Final Determination unless

it is “unsupported by substantial evidence on the record,

or otherwise not in accordance with law.” 19 U.S.C. §

1516a(b)(1)(B). Substantial evidence means “such relevant

evidence as a reasonable mind might accept as adequate to

support a conclusion” taking into account the record as a

whole. Pierce v. Underwood, 487 U.S. 552, 565 (1988)

(citation omitted). It “requires more than a mere

scintilla, but is satisfied by something less than the

weight of the evidence.” Altx, Inc. v. United States, 370

F.3d 1108, 1116 (Fed. Cir. 2004) (citations omitted).

In conducting its review, the Court must consider “not

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only the evidence on the record that justifies the ITC’s

findings, but also whatever in the record fairly detracts

from its weight.” Am. Bearing Mfrs. Ass’n v. United

States, 28 CIT ___, ___ (2004) (citations omitted).

However, the Court “may not reweigh the evidence or

substitute its judgment for that of the ITC.” Dastech

Int’l, Inc. v. USITC, 21 CIT 469, 470, 963 F. Supp. 1220,

1222 (1997). Instead, the Court’s function is to ascertain

“whether there was evidence which could reasonably lead to

the [ITC]’s conclusion[.]” Matsushita Elec. Indus. Co. v.

United States, 750 F.2d 927, 933 (Fed. Cir.

1984). “[T]he possibility of drawing two inconsistent

conclusions from the evidence does not prevent an

administrative agency’s finding from being supported by

substantial evidence.” Id. (citation omitted).

III. DISCUSSION

A. The ITC’s Determination that Subject Imports Did Not

Undersell Domestic UAN Is Supported by Substantial

Evidence and Otherwise in Accordance with Law.

In making its final injury and threat determination,

the ITC was required to consider the effect of subject

imports on domestic UAN prices. 19 U.S.C. §

1677(7)(B)(i)(II). As part of this evaluation, the ITC was

further required to consider whether there had been

“significant price underselling” by subject imports

Court No. 03-00260 Page 6

compared with the price of domestic UAN during the period

of investigation. Id. § 1677(7)(C)(ii)(I). In the Final

Determination, the ITC found that prices of imported UAN

were generally higher than domestic UAN from 1999 to 2001

and for the interim periods of January-September 2001 and

January-September 2002 (together, the “period of

investigation”). Views of the Commission at 20. Relying

in part on this underselling analysis, the ITC ultimately

concluded that there was no evidence of significant price

effects by reason of the subject imports. Id. at 21.

Plaintiff advances four arguments for why the ITC’s

underselling analysis is not supported by substantial

record evidence or otherwise in accordance with law. For

the reasons set forth below, the Court sustains this aspect

of the Final Determination.

1. The ITC Appropriately Excluded Sales Data That

Did Not Involve Comparable Quantities of UAN.

Plaintiff argues that the ITC erred by excluding from

consideration in its underselling analysis certain sales

data from a significant importer into three of the U.S.

cities under investigation ([

]). See Plaintiff’s Memorandum In Support of Its

Rule 56.2 Motion for Judgment on the Agency Record (“Pl.’s

Br.”) at 17. In the Final Determination, the ITC declined

Court No. 03-00260 Page 7

to consider this importer’s sales made by [ ]

because sales using this form of transport “[did] not

involve comparable quantities” and “were generally much

larger than the sales of domestic UAN.” Views of the

Commission at 21 n.101. Plaintiff contends that the ITC

should not have excluded these sales because: (1) except

for one significant importer, none of the sales data

gathered during the investigation distinguished sales based

on transportation modes or shipment quantities, rendering

impossible any comparisons on these bases among non-

excluded sales and (2) most producers (including the

significant importer in question) did not report volume

discounts, indicating that prices for large and small

quantity sales were comparable.1 Pl.’s Br. at 17-20.

According to Plaintiff, this erroneous exclusion resulted

in a flawed set of sales data that skewed the ITC’s

underselling analysis. Id. at 20.

The Court finds that the ITC appropriately excluded

from its underselling analysis sales made by [ ]

because they did not involve comparable quantities of UAN.

First, the Court finds that the ITC had a sufficient data

1

Plaintiff also argues at length that the [ ] sales should not

have been excluded because they were made at the same distribution

level as domestic UAN sales. Pl.’s Br. at 18. However, in the Final

Determination, the ITC never concluded that these sales did not compete

with domestic UAN or were at a different level of trade. Plaintiff’s

arguments concerning this point are, therefore, irrelevant.

Court No. 03-00260 Page 8

set from which it could reasonably make a distinction

between the excluded sales and other reported sales. Using

its final questionnaire, the ITC collected monthly sales

data for certain U.S. cities from domestic UAN producers

and UAN importers over the period of investigation. See

Plaintiff’s Appendix to Plaintiff’s Rule 56.2 Motion for

Judgment Upon the Agency Record (“Pl.’s App.”), App. 12

(Form of Final Questionnaire) at 13. It was not necessary

for the final questionnaire to request per-sale information

on the mode of transport because, contrary to Plaintiff’s

contention, the ITC did not exclude sales on the basis of

their mode of transport. The Final Determination clearly

indicates that the sales in question were excluded solely

because of their incomparable quantities. See Views of the

Commission at 21 n.101. Although these large quantities

were possible only “because of the way in which the product

[was] sold,” this does not equate to a distinction based on

mode of transport. Id. at 21. In addition, the Court

finds that it was not necessary for the final questionnaire

to require per-sale quantity information for all UAN

producers. The per-sale quantity of the excluded sales was

so large that, even if it were assumed that the monthly

sales volume reported by each domestic producer represented

a single sale, the sales in question nonetheless

Court No. 03-00260 Page 9

represented significantly higher quantities in nearly every

month of comparison. See Defendant’s Appendix to

Defendant’s Response in Opposition to Plaintiff’s Rule 56.2

Motion for Judgment Upon the Agency Record (“Def.’s App.”),

List 2, Doc. 108 (ITC Staff Report for INV-AA-031 dated

Mar. 11, 2003) at E-1a-E-2c. As such, the Court finds that

the ITC collected sufficient data upon which to base its

decision to exclude the sales contested by Plaintiff.

Second, the Court finds that the ITC appropriately

used its discretion when declining to compare sales

involving significantly different quantities. The ITC, “as

the trier of fact, has considerable discretion in weighing

the probative value and relevance of evidence.” Hyundai

Electronics Indus. v. United States, 21 CIT 481, 485

(1997). “The [ITC] weighs the evidence as the trier of

fact in these cases, and has authority to reject or

discount data that it determines is unreliable.”

Mitsubishi Materials v. United States, 20 CIT 328, 332, 918

F. Supp. 422, 426 (1996). The ITC’s decision to place less

weight on sales price comparisons involving different

quantities has been upheld previously by this Court. See

Floral Trade Council v. United States, 20 CIT 595 (1996).

In Floral Trade, the ITC’s stated reason for according less

weight to incomparable sale quantities was a concern that

Court No. 03-00260 Page 10

different quantities may have affected relative prices.

Id. at 603. The Floral Trade court found this explanation

to be reasonable. Id. The instant case presents similar

concerns. The significant importer’s excluded sales were

so large as to be of a fundamentally different order of

magnitude than sales by domestic producers. See Def.’s

App., List 2, Doc. 108 (ITC Staff Report for INV-AA-031

dated Mar. 11, 2003) at E-1a-E-2c. Sales of large volumes

may affect product prices, limiting the value of price

comparisons.2 Although Plaintiff contends that relative

prices were not affected in this case because this

significant importer reported that it did not offer

discounts, Pl.’s Br. at 18, this argument is unconvincing.

The significant importer did not have to identify a

discount because, as noted by Plaintiff, the majority of

its 2001 sales were at the lower price offered for [

] sales. Id. at 17. This lower price is the importer’s

predominant selling price and therefore need not result

from a discount per se.

2

The ITC has previously found that different sales quantities can limit

the value of price comparisons. See Spring Table Grapes from Chile and

Mexico, 731-TA-926 and 927 (Preliminary) (June 2001), USITC Pub. 3432

at 16 n.101 (limited utility of price comparisons due to smaller

quantities of subject imports); Bicycles From China, 731-TA-731 (Final)

(June 1996), USITC Pub. 2968 at 14 n.103-04 (Chairman Watson and

Commissioner Crawford) (comparisons entitled to less weight due to

difference in quantities sold); Fresh Cut Roses from Colombia and

Ecuador, 731-TA-684 and 685 (Final) (Mar. 1995), USITC Pub. 2862 at I-

22 (usefulness of comparison limited by different quantities).

Court No. 03-00260 Page 11

Accordingly, the ITC’s exclusion of the [ ]

sales of a significant importer was reasonable and the

resulting sales data set provides substantial evidentiary

support for the ITC’s underselling analysis.

2. The ITC Reasonably Relied on Sales Data and

Representations Submitted by a Significant

Importer During the Final Investigation.

Plaintiff contends that the ITC erred by relying on

the sales data and representations of a significant

importer during the final investigation, resulting in a

flawed set of sales data that skewed the ITC’s conclusions.

Pl.’s Br. at 20. Plaintiff asserts that this significant

importer failed to include sales data for New Orleans in

its responses to the final investigation questionnaire.

Id. In support of this contention, Plaintiff points to

this importer’s preliminary investigation questionnaire

responses, which included data on a significant amount of

New Orleans sales. Id. at 21-22. Plaintiff contends that

this significant importer misrepresented its New Orleans

sales to the ITC by claiming that sales reported in the

preliminary investigation did not meet the revised pricing

parameters of the final investigation questionnaire. Id.

The final investigation questionnaire required this

importer to report only those sales made on a [

] basis to the receiving points of U.S. customers in

Court No. 03-00260 Page 12

certain U.S. cities and their proximate locations. See

Def.’s App., List 2, Doc. 207 (Importer’s Questionnaire

Responses of [ ] dated Dec. 13, 2002) at

8. Plaintiff argues that the ITC ignored substantial

record evidence indicating that the New Orleans sales data

produced by the significant importer during the preliminary

investigation was in fact responsive to the final

questionnaire. Pl.’s Br. at 21. Specifically, Plaintiff

notes that this importer’s questionnaire responses

indicated that (1) [ ] percent of its product was

delivered within [ ] miles of its initial shipping

location and [ ] percent of its product was delivered to [

]; (2) the importer could not comment on [

];

and (3) the importer typically quoted selling prices on a [

] basis for product delivered [ ] and on a [ ]

basis for product delivered [ ]. See

Def.’s App., List 2, Doc. 207 (Importer’s Questionnaire

Responses of [ ] dated Dec. 13, 2002) at

8, 18-19. Plaintiff argues that the ITC’s reliance on

obviously incomplete sales data for New Orleans skewed the

ITC’s underselling analysis, rendering it unsupported by

substantial evidence. Pl.’s Br. at 23.

The Court finds that the ITC reasonably relied on the

Court No. 03-00260 Page 13

sales data and representations submitted by the significant

importer in question during the final investigation.

First, the ITC appropriately used its discretion to assess

the credibility and reliability of the information it

received during the investigation. See Chefline Corp. v.

United States, 25 CIT 1129, 1136, 170 F. Supp. 2d 1320,

1330 (2001) (“[I]t is within the [ITC]’s discretion to make

reasonable interpretations of the evidence and to determine

the overall significance of any particular factor or piece

of evidence.”) (citation omitted). The ITC is under no

legal obligation to perform an onsite verification or audit

of final questionnaire responses in an antidumping

investigation. See Titanium Metals Corp. v. United States,

25 CIT 648, 663, 155 F. Supp. 2d 750, 765 (2001) (noting

that “Congress has not required the [ITC] to conduct

verification procedures for the evidence before it, or

provided a minimum standard by which to measure the

thoroughness of [an ITC] investigation”) (citation

omitted); see also Mitsubishi Elec. Corp. v. United States,

12 CIT 1025, 1058, 700 F. Supp. 538, 564 (1988) (ITC has

discretion in verifying data received but may not actively

preclude itself from receiving relevant or contrary data).

Here, the importer in question submitted the required

certification as to the accuracy and completeness of its

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final questionnaire responses. See Pl.’s App., App. 15

(Importer’s Questionnaire Responses of [ ]

dated Dec. 18, 2002) at 1. Choosing not to rely solely on

this certification, the ITC took additional steps to ensure

that the data was reliable. The ITC conducted multiple

telephone conversations with this importer between December

2002 and March 2003 in order to make certain that this

importer first understood the revised pricing parameters of

the final questionnaire and then had provided data for all

responsive sales. See Def.’s App., List 2, Doc 112 (ITC

Staff Handwritten Notes from Dec. 2002-Mar. 2003) at 17,

26; id., List 2, Doc 209 (Letter Accompanying Revised

Importer’s Questionnaire of [ ] dated Mar.

4, 2003) at 2. The ITC was told by the importer and its

counsel that they understood the parameters of the final

questionnaire and that sales out of New Orleans were not

made in a manner that met these parameters. It was within

the ITC’s discretion to rely on questionnaire responses

verified in this way.

Second, the Court’s review of the record evidence

supports the ITC’s conclusion that this importer’s New

Orleans sales did not meet the final questionnaire pricing

parameters. This significant importer’s questionnaire

responses indicated that [ ] percent of its product was

Court No. 03-00260 Page 15

delivered to [ ] and that

sales of this nature were quoted on a [ ] basis –

not [ ] as required by the final questionnaire pricing

parameters. See Def.’s App., List 2, Doc. 207 (Importer’s

Questionnaire Responses of [ ] dated Dec.

13, 2002) at 8, 18-19. Given that a very high percentage

of this importer’s total sales did not meet the final

questionnaire’s pricing parameters, it is not surprising

that this importer did not report sales for one of the five

U.S. cities under investigation. Indeed, the Court notes

that a member of Plaintiff’s trade committee, [

], also did not report sales

data for New Orleans or any other city due to the revised

pricing parameters of the final questionnaire. See id.,

List 2, Doc. 108 (Final Staff Report dated Mar. 11, 2003)

at V-22. Further, given the proximity of New Orleans to

the Mississippi river system, it is also not surprising

that New Orleans sales were received by customers at points

further inland, resulting in delivery terms which were non-

responsive to the final questionnaire’s pricing parameters.

In addition, none of this importer’s [

] were proximate to New Orleans. See id., List 2,

Doc. 76 (Importer’s Questionnaire Responses of [

] dated May 6, 2002) at 31. Although this evidence is not

Court No. 03-00260 Page 16

necessarily reflective of the actual receiving points of

this importer’s New Orleans sales, Plaintiff is unable to

point to any direct contradicting evidence other than its

own interpretation of the importer’s questionnaire

responses. In light of the entire record, the Court finds

that Plaintiff’s alternative reading is insufficient to

upset the substantial evidence standard.

Third, Plaintiff’s interpretation of the questionnaire

responses seems implausible. Under Plaintiff’s reading of

the questionnaire responses, [ ] percent of the importer’s

sales occurred within 100 miles of its shipping locations

and [ ] percent of its sales occurred over 500 miles from

its shipping locations. These percentages total more than

100 percent - a result unexplained by Plaintiff.

Plaintiff’s reading of this importer’s questionnaire

responses does indicate that there were certain ambiguities

in these responses, leading to the possibility of

alternative inferences. However, even if the Court were

inclined to agree with Plaintiff’s strained interpretation,

the Court’s standard of review prevents it from

reevaluating the evidence. See Koyo Seiko Co. v. United

States, 24 CIT 364, 366, 110 F. Supp. 2d 934, 936 (2000)

(“It is not within the court’s domain . . . to reject a

finding on grounds of a differing interpretation of the

Court No. 03-00260 Page 17

record.”) (citations omitted).

Accordingly, the ITC’s reliance on this significant

importer’s questionnaire responses was reasonable and the

resulting New Orleans sales data set provides substantial

evidentiary support for the ITC’s underselling analysis.

3. The ITC Appropriately Accepted Sales Data and

Pricing Arguments Submitted by a Significant

Importer in an Ex Parte Communication with the

ITC Fourteen Days Before the Record Closed.

Plaintiff contends that the ITC erred by considering,

for purposes of its underselling analysis, certain sales

data and pricing arguments submitted by a significant

importer on March 3, 2003, fourteen days before the record

closed. Pl.’s Br. at 24. Plaintiff argues that the ITC’s

consideration of this information was not in accordance

with law because: (1) the information was submitted more

than five months after comments were due on the

questionnaire used by the ITC to collect sales and pricing

data; (2) the information was communicated in verbal form

during an ex parte communication, which violated the ITC’s

requirement that such comments be submitted in written form

and served on all parties; and (3) the ITC delayed

releasing the pricing arguments until March 11, 2003, six

days before the record closed. Id. at 24-28. Plaintiff

contends that it was prejudiced by the ITC’s improper

Court No. 03-00260 Page 18

consideration of this data because it was not allowed

sufficient time to defend its interests. Id. at 29.

The Court finds that the ITC appropriately accepted

sales data and pricing arguments submitted by a significant

importer in an ex parte communication on March 3, 2003.

First, Plaintiff mischaracterizes the nature of the sales

data and pricing arguments made by the importer in

question. The Court finds that this information was not a

belated attack on the final questionnaire format or means

of data collection as alleged by Plaintiff; rather, the

record indicates that the sales data and pricing arguments

were submitted in response to questions posed by the ITC as

part of an ongoing dialogue concerning the antidumping

investigation. See Def.’s App., List 2, Doc. 112 (ITC

Staff Handwritten Notes from Dec. 2002-Mar. 2003); id.,

List 2, Doc. 68 (ITC Staff Handwritten Notes from Apr.-May

2002). Neither the antidumping statute nor the ITC’s rules

governing this investigation set an earlier deadline by

which such responses should have been submitted.

Second, ex parte communications are a necessary part

of an antidumping investigation and are expressly

sanctioned by law. See 19 U.S.C. § 1677f(a)(3)

(prescribing rules for ex parte meetings held by ITC);

United States v. Roses, Inc., 706 F.2d 1563, 1567 (Fed.

Court No. 03-00260 Page 19

Cir. 1983) (“Dumping investigations do not include and

never have included due process adversary hearings, but

always have included ex parte meetings separately with the

contenders.”). The antidumping statute and regulations

require information to be submitted in written form and

served on all parties only in certain contexts. See, e.g.,

19 C.F.R. § 207.20(b) (requiring comments on draft final

questionnaire to be submitted in writing). Because the

Court finds that the arguments made by this importer on

March 3, 2003 were not a disguised commentary on the final

questionnaire, there is no statutory basis for requiring

that these arguments be submitted in writing.

Finally, even if the ITC had violated its own

procedures by accepting the March 3, 2003 sales data and

pricing arguments or releasing the sales arguments eight

days later, Plaintiff has failed to show that it was

prejudiced by such actions. A claim of a procedural

violation by an agency is actionable only upon a showing of

prejudice to a party which is curable on remand. Allegheny

Ludlum v. United States, 24 CIT 858, 873, 116 F. Supp. 2d

1276, 1291 (2000), vacated and remanded on other grounds,

287 F.3d 1276 (Fed. Cir. 2002). Plaintiff was served with

the March 3, 2003 sales data on that same day. See Def.’s

App., List 2, Doc. 222 (Certificate of Service dated Mar.

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3, 2003). Plaintiff was provided with the March 3, 2003

pricing arguments eight days later – in time for Plaintiff

to submit two filings with the ITC specifically commenting

on the March 3, 2003 sales data and pricing arguments. See

id., List 2, Doc. 107 (Plaintiff’s Memo Providing

Additional Information Requested by the ITC dated Mar. 14,

2003); id., List 2, Doc. 118 (Plaintiff’s Final Comments

dated Mar. 19, 2003). Although these filings were page and

content-limited under ITC regulations, the points raised by

Plaintiff in these two filings are nearly identical to

those made before the Court. As such, the Court finds that

Plaintiff was afforded an adequate opportunity to present

its views to the ITC concerning the March 3, 2003 sales

data and pricing arguments before the administrative record

closed.

Accordingly, the ITC’s decision to accept the March 3,

2003 sales data and pricing arguments of a significant

importer is in accordance with law.

4. The ITC Adequately Addressed Plaintiff’s

Arguments Concerning the ITC’s Underselling

Analysis.

Plaintiff argues that the ITC erred because the Final

Determination did not address certain of Plaintiff’s

arguments concerning the ITC’s underselling analysis.

Pl.’s Br. at 29. Under the antidumping statute, the ITC is

Court No. 03-00260 Page 21

required to include in its final injury determination “an

explanation of the basis for its determination that

addresses relevant arguments that are made by interested

parties . . . concerning volume, price effects, and impact

on the industry.” 19 U.S.C. § 1677f(i)(3)(B). Plaintiff

contends that the ITC did not consider: (1) Plaintiff’s

anecdotal evidence of underselling and lost revenues/sales

and (2) Plaintiff’s arguments concerning the price

ramifications of mixed over- and underselling by high

volume imports in a commodity market.3 Pl.’s Br. at 29-31.

The Court finds that the ITC adequately addressed

Plaintiff’s arguments concerning the ITC’s underselling

analysis. First, the ITC plainly referenced anecdotal

evidence of underselling in the Final Determination. See

Views of the Commission at 23 (“We also note that none of

the petitioners’ lost sales or lost revenue allegations was

confirmed.”). During the investigation, Plaintiff made 45

specific allegations of lost sales and lost revenues – none

of which could be confirmed by the ITC. See Def.’s App.,

List 2, Doc. 108 (ITC Staff Report for INV-AA-031 dated

Mar. 11, 2003) at V-66. Although Plaintiff submitted

3

Plaintiff also argues that the ITC failed to address its concerns

about the sales data used to develop the underselling analysis. Pl.’s

Br. at 30. Since the Court finds that the ITC used an adequate sales

data set, as discussed infra at III.A.1-2, this argument is not

addressed.

Court No. 03-00260 Page 22

anecdotal evidence of underselling later in the

investigation, the ITC “has broad discretion in analyzing

and assessing the significance of evidence on price

undercutting.” Nucor Corp. v. United States, 28 CIT ___,

___, 318 F. Supp. 2d 1207, 1256 (2004) (citing Copperweld

Corp. v. United States, 12 CIT 148, 161, 682 F. Supp. 552,

565 (1988) (citing S. REP. No. 96-249, at 88 (1979),

reprinted in 1979 U.S.C.C.A.N. at 474). The ITC reasonably

chose to rely on the evidence developed by its staff,

rather than Plaintiff, and the Court will not disturb this

decision. Further, the Court notes that, at best,

Plaintiff’s anecdotal evidence simply indicates that some

underselling occurred during the period of investigation –

a fact that was clearly acknowledged in the Final

Determination. See Views of the Commission at 20 (“. . .

and [ ] short tons was undersold.”).

Second, the ITC also plainly referenced Plaintiff’s

mixed over- and underselling theory in the Final

Determination. See id. at 20 (“Petitioners argue that the

picture of underselling/overselling would be more ‘mixed’

. . .”). The ITC explained that it chose not to adopt

Plaintiff’s theory because it would have required the ITC

to consider sales data that, for the reasons discussed

infra at III.A.1-2, the ITC reasonably excluded from its

Court No. 03-00260 Page 23

data set. Further, the Court notes that, even though the

ITC has in the past applied the mixed over- and

underselling theory suggested by Plaintiff, it is not

required to do so in every investigation. See Nucor, 28

CIT at ___, 318 F. Supp. 2d at 1247 (“It is a well-

established proposition that the ITC’s material injury

determinations are sui generis; that is, the agency’s

findings and determinations are necessarily confined to a

specific period of investigation with its attendant,

peculiar set of circumstances.”) (citations omitted).

Accordingly, the ITC’s consideration and treatment of

Plaintiff’s arguments concerning the ITC’s underselling

analysis is in accordance with law.

B. The ITC’s Determination that Subject Imports Did Not

Depress or Suppress Domestic UAN Prices Is Supported

by Substantial Evidence and Otherwise in Accordance

with Law.

As part of its required evaluation of the effect of

subject imports on domestic UAN prices, the ITC was

obligated to consider whether subject imports had

significantly depressed or suppressed domestic UAN prices.

19 U.S.C. § 1677(7)(C)(ii)(II). In the Final

Determination, the ITC found that prices for domestic UAN

rose in tandem with natural gas prices, suggesting that

domestic prices were not depressed by subject imports.

Court No. 03-00260 Page 24

Views of the Commission at 21. Further, the ITC found that

the net sales unit values of domestic producers increased

more than their unit cost of goods sold (“COGS”) during

most of the period of investigation, indicating that

domestic prices were not suppressed by subject imports

relative to costs. Id. at 22-23. The ITC concluded that

subject imports had not depressed or suppressed domestic

UAN prices to any significant degree during the period of

investigation. Id. at 23. Relying in part on this

negative price depression/suppression analysis, the ITC

ultimately concluded that there was no evidence of

significant price effects by reason of the subject imports.

Id. at 21.

Plaintiff advances one major argument for why the

ITC’s price depression/suppression analysis is not

supported by substantial record evidence or otherwise in

accordance with law.4 For the reasons set forth below, the

Court sustains this aspect of the Final Determination.

Plaintiff contends that the ITC erred by using full-

4

Plaintiff also presents two additional arguments countering the ITC’s

price depression/suppression analysis. First, Plaintiff argues that

the ITC’s sales data set was flawed, leading to an incorrect price

depression/suppression analysis. Pl.’s Br. at 23. Since the Court

finds that the ITC used an adequate sales data set, as discussed infra

at III.A.1-2, this argument is not addressed. Second, Plaintiff

contends that the ITC improperly weighed anecdotal evidence of lost

sales and lost revenues, which further skewed the price

depression/suppression. Id. at 24. Since the Court finds that the ITC

properly weighed this evidence, as discussed infra at III.A.4, this

argument is not addressed.

Court No. 03-00260 Page 25

year data to examine the correlation between domestic UAN

prices and natural gas prices. Pl.’s Br. at 23-24.

Plaintiff argues that if the ITC had analyzed half-year

data instead of full-year data, it would have found that,

in the second half of 2001, the domestic industry’s COGS

was higher than domestic UAN prices and the domestic UAN

industry suffered one of its worst financial performances

of the entire period of investigation. Id. at 38-40. This

time period corresponded with the highest levels of subject

imports during the period of investigation, despite falling

natural gas prices. Id. Plaintiff argues that these

facts, revealed only by using half-year data, help

establish that the peak volume of subject imports in the

second half of 2001 did in fact suppress domestic UAN

prices. Id. at 24.

The Court finds that the ITC reasonably chose to use

full-year pricing data when evaluating the correlation

between domestic UAN prices and natural gas prices. First,

the ITC’s broad discretion in choosing the time frame for

its investigation and analysis has consistently been

upheld. See Wieland Werke, AG v. United States, 13 CIT

561, 567, 718 F. Supp. 50, 55 (1989) (approving three-year

period of investigation); British Steel Corp. v. United

States, 8 CIT 86, 93, 593 F. Supp. 405, 410-11 (1984)

Court No. 03-00260 Page 26

(approving analysis of calendar year data rather than

quarterly data); Amer. Spring Wire Corp. v. United States,

8 CIT 20, 26, 590 F. Supp. 1273, 1279 (1984), aff’d sub

nom., Armco Inc. v. United States, 760 F.2d 249 (Fed. Cir.

1985) (approving analysis of calendar year data rather than

quarterly data). Neither the antidumping statute nor

existing case law requires the ITC to examine half-year

data if it reasonably finds that full-year data is

probative. See Amer. Spring Wire, 8 CIT at 26, 500 F.

Supp. at 1279 (“[T]he ITC is not required by the statute to

use any particular timeframe for its analysis, although it

generally focuses on annual time periods.”).

Second, the Court finds that the ITC appropriately

exercised its discretion in the selection of the full-year

period of analysis in this case. As an initial matter, the

Court notes that the ITC’s general practice is “to conduct

an annual analysis of the volume and effects of imports

over the period of investigation.” Steel Auth. of India v.

United States, 25 CIT 472, 477, 146 F. Supp. 2d 900, 907

(2001) (emphasis added). It was reasonable for the ITC to

follow standard procedure by initially examining the full-

year periods in this case. However, unlike the ITC’s

investigation in Timken Co. v. United States, 27 CIT ___,

264 F. Supp. 2d 1264 (2003), the ITC did not ignore more

Court No. 03-00260 Page 27

detailed information that it had relied on in an earlier

phase of the proceeding. Rather, while employing an

overall annual analysis, the ITC also specifically

addressed the 2001 half-year data and arguments advanced by

Plaintiff. See Views of the Commission at 27 (“The

petitioners argue that the domestic industry’s condition

continued to deteriorate after U.S. natural gas prices

normalized by the second half of 2001 and that subject

imports remained a significant presence in the U.S. market.

However . . .”). The ITC simply disagreed with Plaintiff’s

interpretation of this data. Using Plaintiff’s data, the

ITC found that subject imports declined between the third

and fourth quarters of 2001, citing market factors5 which

reasonably explained the delayed response time to falling

(but, the Court notes, nonetheless quite high) natural gas

prices. Id. As such, the Court finds that “plaintiff’s

position is one which would necessitate judicial reweighing

of the evidence to take into account the factors and

approach it favors, but this [C]ourt is not at liberty to

reweigh evidence in an action such as this.” Roses, Inc.

v. United States, 13 CIT 662, 667, 720 F. Supp. 180, 184

(1989) (finding it permissible for the ITC to rely on

annual, as opposed to quarterly, financial data when making

5

These factors are discussed more fully infra at III.C.1.

Court No. 03-00260 Page 28

its analysis).

Finally, the Court finds that the ITC’s determination

adequately met the antidumping statute’s requirement that

“significant” price depression/suppression be considered in

the analysis of subject imports’ price effects. 19 U.S.C.

§ 1677(7)(C)(ii)(II). Although half-year data was not

used, the record shows that the ITC did consider changes in

domestic prices and per unit profit margins during the

period of investigation. See Views of the Commission at 22

n.106 (explaining that Plaintiff’s average unit price data

is useful for examining price trends, but not as a

surrogate for price comparisons); id. at 23 n.108

(analyzing COGS and sales unit values during the period of

investigation); Def.’s App., List 2, Doc. 108 (ITC Staff

Report for INV-AA-031 dated Mar. 11, 2003) at C-2. The ITC

determined that the price depression/suppression caused by

subject imports was not “significant[.]” Views of the

Commission at 23. Such a determination does not mean that

price depression/suppression was nonexistent; rather, the

depressive or suppressive effects of subject imports did

not rise to an actionable level under the antidumping

statute. Plaintiff’s own evidence of price suppression

reinforces this conclusion, given that Plaintiff points

only to data from the second half of 2001 to prove price

Court No. 03-00260 Page 29

suppression, Pl.’s Br. at 24, despite the presence of high

volume subject imports in response to climbing natural gas

and UAN prices during much of the period of investigation.

Id. at 4. When weighed against the ITC’s full data set

from the period of investigation – covering three years and

an eight month interim period – this data is insufficient

to undermine the substantial evidence supporting the ITC’s

price depression/suppression analysis.

Accordingly, the ITC’s selection of full-year data for

its analysis of price suppression/depression is in

accordance with law.

C. The ITC’s Determination that the “Significant” Volume

of Subject Imports Was Mitigated by Market Conditions

Is Supported by Substantial Evidence and Otherwise in

Accordance with Law.

In making its final injury and threat determination,

the ITC was required to analyze the volume of subject

imports, specifically whether the volume (or increase in

volume) of subject imports was significant during the

period of investigation, either in absolute terms or

relative to domestic UAN production or consumption. See 19

U.S.C. § 1677(7)(B)(i)(I); id. § 1677(7)(C)(i). In the

Final Determination, the ITC found that “[t]he increase in

volume of the subject imports both absolutely and relative

to domestic consumption over the period of investigation

Court No. 03-00260 Page 30

was significant.” Views of the Commission at 17. However,

the ITC noted that the significance of this volume “must be

viewed in the context of prevailing market conditions” –

specifically the sharp spike in natural gas prices

resulting in higher UAN costs, domestic production cutbacks

and high UAN prices. Id. at 17-18. The ITC noted that the

total volume of subject imports rose and fell roughly in

tandem with natural gas prices, citing as a specific

example the declining volume of subject imports shipped to

Gulf Coast cities during the second half of 2001. Id. at

18, 27. The ITC also noted that long lead times between

orders and deliveries could have accounted for the somewhat

delayed response of subject imports to falling gas prices

in the second half of 2001. Id. at 27. To draw these

conclusions, the ITC relied on data from 2001 and 2002,

which included the date the petition was filed. Id. at 17-

18. However, the ITC found that the decline in subject

imports predated petition filing and was instead related to

natural gas price effects. Id. at 18 n.85.

Plaintiff advances two arguments for why the ITC’s

volume analysis is not supported by substantial record

evidence or otherwise in accordance with law. For the

reasons set forth below, the Court sustains this aspect of

the Final Determination.

Court No. 03-00260 Page 31

1. The ITC’s Analysis of the Relationship between

Natural Gas Prices and Subject Import Volume Is

Reasonable.

Plaintiff contests the ITC’s conclusion that the

volume of subject imports rose and fell in tandem with

natural gas prices. Pl.’s Br. at 31. Plaintiff argues

that record evidence instead shows that the total volume of

subject imports reached a historical peak in the second

half of 2001, as natural gas prices were falling, and

remained at “exceptionally high” levels through the first

quarter of 2002. Id. at 32. Plaintiff argues that only

non-subject imports of UAN declined along with natural gas

prices – subject imports remained at high volumes and only

began to significantly decrease after the antidumping

petition was filed. Id. For example, Plaintiff notes that

subject imports into Gulf Coast cities declined only 1.4

percent during the second half of 2001. Id. at 34.

The Court finds that the correlation made by the ITC

between natural gas prices and subject import volume is

reasonable. First, the Court notes that Plaintiff places

great, but misdirected, weight on the fact that subject

imports were “exceptionally high” during key points in the

period of investigation. Pl.’s Br. at 32. This fact is

simply not in dispute. In the Final Determination, the ITC

itself concluded that the volume of subject imports was

Court No. 03-00260 Page 32

“significant” – a factor taken into account in its injury

analysis. Views of the Commission at 17. By examining the

mitigating role of natural gas price effects on the

significance of subject import volume, the ITC did not

impermissibly qualify its conclusion; rather, the agency

exercised its statutory right to consider “such other

economic factors as are relevant to the determination.” 19

U.S.C. § 1677(7)(B)(ii). Plaintiff does not allege (nor

could it) that the ITC abused its discretion in considering

natural gas prices to be such an economic factor.

Second, the Court finds that the ITC’s conclusion

regarding natural gas price effects is supported by record

evidence. Recognizing the importance of natural gas prices

as an economic factor, the ITC indicated during the

Preliminary Determination its intention to “fully explore”

the role of natural gas prices on the domestic UAN industry

during the final investigation. Preliminary Views of the

Commission at 25-26. The ITC dutifully pursued this line

of analysis during the final investigation, collecting

information from questionnaire respondents on, inter alia,

the net cost of natural gas inputs, use of natural gas

purchase options, contract terms of natural gas purchases

and the effect of natural gas prices on UAN production.

See, e.g., Pl.’s App., App. 12 (Form of Final

Court No. 03-00260 Page 33

Questionnaire) at 10-11, 21-23 (requesting information

related to natural gas usage and effects); id., App. 16

(ITC Staff Report dated Feb. 7, 2003) at V1-V4 (discussing

natural gas as a raw material cost affecting pricing);

Def.’s App., List 2, Doc. 112 (ITC Staff Handwritten Notes

from Dec. 2002-Mar. 2003) (discussing UAN and natural gas

data). The ITC compared this information on natural gas

with the trends in domestic UAN prices, domestic UAN

consumption and the volume of subject imports discerned

from other information collected from questionnaire

respondents. See, e.g., Pl.’s App., App. 12 (Form of Final

Questionnaire); Def.’s App., List 2, Doc. 108 (ITC Staff

Report dated Mar. 14, 2003) at V-3, V-18; id., List 2, Doc.

98 (Plaintiff’s Pre-Hearing Brief to the ITC dated Dec. 13,

2003) at Ex. 6 (cited by ITC in the Final Determination);

Views of the Commission at 22 n.103. Based on this

substantial evidence, the ITC found a positive correlation

between natural gas prices and the volume of subject

imports. The ITC had sufficient evidentiary grounds on

which to base this conclusion.

Finally, the Court finds that the failure of subject

imports to decline exactly in tandem with natural gas

prices does not refute the existence of a positive

correlation. The record reveals, and Plaintiff concedes,

Court No. 03-00260 Page 34

that subject imports did begin to slowly decline shortly

after the fall in natural gas prices and before the filing

of the antidumping petition. Id. at 18 n.85 (citing

evidence of volume levels supplied by Plaintiff during the

final investigation). Further, even among non-subject

imports, which Plaintiff notes declined at a faster rate

than subject imports, the timing of market exit varied

among imports from different countries. Def.’s App., List

2, Doc. 133 (Plaintiff’s Post-Hearing Brief dated Feb. 27,

2003) at Ex. 15. This evidence lends support to the ITC’s

finding that different contractual terms, including

ordering lag times, delayed the response of subject imports

from different producers in different countries to changing

market conditions in the U.S. Views of the Commission at

27 n.127. Although Plaintiff counters that certain

evidence indicates that contract lead times were too short

to account for the delay, Pl.’s Br. at 41, there is also

record support for the ITC’s conclusion. See Def.’s App.,

List 2, Doc. 108 (ITC Staff Report for INV-AA-031 dated

Mar. 11, 2003) at II-28 (shipment times ranged from [ ] to

[ ]); Appendix to Memorandum of Defendant Intervenors

JSC Nevinnomysskij Azot, Inc. and Transammonia, Inc. in

Opposition to Plaintiffs’ Motion for Judgment on the Agency

Record, List 1, Doc. 121 (Commission Hearing Transcript for

Court No. 03-00260 Page 35

INV-731-TA-1006, 1008 and 1009 (Final)) at 187-88 (witness

noting lead times of [ ] are only for physical

delivery and that orders can be placed up to [ ] in

advance). As discussed infra at III.A.1, the ITC is owed

deference in its weighing of the record evidence and

Plaintiff has failed to raise sufficiently serious concerns

to disturb the ITC’s finding.

Accordingly, the ITC’s analysis of the relationship

between natural gas prices and subject import volume is

supported by substantial evidence.

2. The ITC Reasonably Considered Pre- and Post-

Petition Data When Comparing Relative Subject

Import Volumes.

Plaintiff argues that the ITC erred in considering

subject import volumes for the January-September 2002

interim period in its volume analysis. Pl.’s Br. at 33.

Plaintiff contends that the decrease in subject imports

observed during this period was aberrational; subject

import volumes were distorted by the threat of an

antidumping petition, which was ultimately filed in April

2002. Id.

The Court finds that the ITC exercised appropriate

discretion in evaluating post-petition data related to

declining subject import volumes. The antidumping statute

expressly grants the ITC discretion in weighing post-

Court No. 03-00260 Page 36

petition data. 19 U.S.C. § 1677(7)(I) (“[T]he ITC may

reduce the weight accorded to the data for the period after

the filing of the petition in making its determination . .

.”) (emphasis added). Cases applying this provision have

recognized the ITC’s significant discretion in its weighing

of such information. See Altx, Inc. v. United States, 25

CIT 1100, 1105, 167 F. Supp. 2d 1353, 1361 (2001)

(recognizing that the ITC “is not required to discount the

relevant data even if the agency finds a change in data to

be related to the pendency of the investigation”). Here,

the ITC plainly established that subject imports began to

decline before the petition filing. Views of the

Commission at 17-18. In the Final Determination, the ITC

took into consideration the possibility that the threat of

the petition may have “contributed to the drop in subject

imports” toward the end of the period of investigation.

Id. at 18 n.85. The ITC nonetheless concluded that the

decline in subject imports was due, at least in part, to

factors other than the antidumping petition, such as

natural gas price effects. Id. This conclusion was within

the ITC’s discretion.

Accordingly, the ITC appropriately considered post-

petition data which was consistent with pre-petition data

demonstrating a trend of declining subject imports.

Court No. 03-00260 Page 37

D. The ITC’s Negative Impact Determination Is Supported

by Substantial Evidence and Otherwise in Accordance

with Law.

In making its final injury and threat determination,

the ITC was required to consider the impact of subject

imports on domestic UAN producers. 19 U.S.C. §

1677(7)(B)(i)(III). As part of this evaluation, the ITC

was further required to “evaluate all relevant economic

factors which have a bearing on the state of the industry

in the United States.” Id. § 1677(7)(C)(iii). In the

Final Determination, the ITC analyzed factors such as

“output, sales, inventories, capacity utilization, market

share, employment, wages, productivity, profits, cash flow,

return on investment, ability to raise capital, and

research and development.” Views of the Commission at 23.

The ITC found that “[w]hile the domestic industry generally

reported losses during the period of investigation, the

losses [were] not attributable to any significant degree to

the subject imports.” Id. at 25. To make this conclusion,

the ITC drew on the results of its pricing and volume

analysis. Specifically, the ITC noted that subject imports

had not had an adverse effect on industry prices, as

demonstrated by the relative lack of underselling and

minimal price depression/suppression. Id. The ITC also

noted that, during the period of investigation, the

Court No. 03-00260 Page 38

domestic industry’s financial condition was at its worst in

1999, when subject imports had minimal presence (less than

[ ] percent of the domestic market). Id. at 26.

Recognizing that the domestic industry’s profitability also

declined later in the period of investigation, the ITC

attributed this to natural gas price effects, rather than

subject imports. Id. To support this finding, the ITC

noted that the domestic industry experienced significant

production curtailments during the period of investigation

due to high natural gas prices. Id. at 24. In general,

the ITC found that unscheduled production curtailments

totaled approximately 154,000 tons per month from September

to March 2001 and created “a perception in the marketplace

(if not reality) that domestic supply was unreliable.” Id.

at 25. Based on these findings, the ITC found that subject

imports did not have a significant adverse impact on the

domestic industry. Id. at 28.

Plaintiff advances one major argument6 for why the

6

Plaintiff also presents three additional arguments countering the

ITC’s impact analysis. First, Plaintiff argues that the ITC’s flawed

underselling analysis, used to support the ITC’s impact analysis,

renders the ITC’s negative impact determination unsustainable. Pl.’s

Br. at 36. Since the Court sustains the ITC’s underselling analysis,

as discussed infra at III.A, this argument is not addressed. Second,

Plaintiff argues that the ITC’s erroneous analysis of full-year data,

rather than half-year data, obscured the true impact of subject imports

on the domestic industry. Since the Court sustains the ITC’s decision

to use full-year data, as discussed infra at III.B, this argument is

not addressed. Id. at 39. Third, Plaintiff contends that the ITC

improperly considered volume data from the interim period, which

included the date of the antidumping petition filing, when making its

Court No. 03-00260 Page 39

ITC’s impact analysis is not supported by substantial

evidence or otherwise in accordance with law. For the

reasons set forth below, the Court sustains this aspect of

the Final Determination.

Plaintiff argues that the ITC based its impact

analysis, in part, on the incorrect assertion that domestic

UAN production was significantly curtailed as a result of

high natural gas prices. Pl.’s Br. at 36. Plaintiff

contends that record evidence shows that a total of only [

] tons of domestic production were curtailed

specifically due to high natural gas prices during

September 2000 to March 2001 – an amount far less than that

found by the ITC. Id. Plaintiff further contends that the

record indicates that millions more tons were curtailed as

a result of inventory controls and poor market conditions –

causes which Plaintiff attributes to subject imports. Id.

at 37. Plaintiff argues that this evidence was ignored by

the ITC and contradicts the ITC’s conclusion that natural

gas prices were the cause of the industry’s poor condition

during the period of investigation. Id.

The Court finds that record evidence concerning

domestic UAN production curtailments, adequately addressed

impact determination. Id. at 43. Since the Court sustains the ITC’s

volume analysis and use of data from the interim period, as discussed

infra at III.C, this argument is not addressed.

Court No. 03-00260 Page 40

in the Final Determination, supports the ITC’s impact

analysis. Plaintiff is correct that only [ ] tons of

domestic production curtailments were directly attributable

to natural gas price effects. See Def.’s App., List 2,

Doc. 108 (ITC Staff Report for INV-AA-031 dated Mar. 11,

2003) at III-3. However, the ITC does not impermissibly

attribute a larger amount of production curtailments to

this specific root cause. Rather, building on a detailed

comparison of domestic UAN production curtailments,

capacity and inventory data during the period of

investigation, the Final Determination generally notes that

significant unscheduled production curtailments occurred

during the period of investigation, coinciding with the

natural gas price peak. Views of the Commission at 24.

This observation is supported by substantial evidence. See

Def.’s App., List 2, Doc. 108 (ITC Staff Report for INV-AA-

031 dated Mar. 11, 2003) at III-3-III-5, Table C-2. It is

Plaintiff which baldly asserts a cause for these additional

curtailments – subject imports. Yet, Plaintiff cites to no

record evidence explaining that all production curtailments

attributed to “inventory control” and “market conditions”

are best understood to be caused solely by subject imports.

A review of Plaintiff’s own evidence reveals why it is

unable to provide record support for this correlation. In

Court No. 03-00260 Page 41

Exhibit 17 of Plaintiff’s Pre-hearing Brief to the ITC,

which summarized the detailed production curtailment

information reported by U.S. producers for October 2000 to

September 2002, Plaintiff categorizes curtailments

according to their reported root cause. Id., List 2, Doc.

98 (Plaintiff’s Pre-Hearing Brief to the ITC dated Dec. 13,

2003), Ex. 17 at 3. Predictably, “natural gas prices” and

“inventory control/market conditions” are listed as

categories; however, the summary also includes a separate

line item for curtailments caused by “subject imports.”

Id. Where Plaintiff makes categorical distinctions among

the root causes of production curtailments earlier in an

antidumping investigation, the Court will not allow it to

later conflate such categories to achieve a desired result.

Accordingly, the ITC’s consideration of domestic

production curtailments is supported by substantial

evidence.

E. The ITC’s Negative Threat Determination Is Supported

by Substantial Evidence and Otherwise in Accordance

with Law.

In making its final injury and threat determination,

the ITC was required to analyze whether further dumped

imports of UAN were imminent and whether material injury by

reason of such imports would occur. 19 U.S.C. §

1677(7)(F)(ii). In the Final Determination, the ITC

Court No. 03-00260 Page 42

concluded that the domestic UAN industry was not threatened

with material injury by subject imports. Views of the

Commission at 29. In reaching this conclusion, the ITC

found that there was a limited amount ([ ] percent) of

additional production capacity from the subject countries

that could be diverted to the U.S., since approximately

two-thirds of production from the subject countries had

already been exported during the period of investigation.

Id. at 31. The ITC also found that additional UAN was

unlikely to shift from the European Union (“EU”) to the

U.S., despite the imposition of EU antidumping orders on

subject imports, since these orders had been in place

during the period of investigation and had not caused such

a shift. Id. at 32. Because it found that subject imports

had not caused material injury to the domestic industry

during the period of investigation and were not likely to

dramatically increase in the future, the ITC made a

negative threat determination. Id. at 33-34.

Plaintiff advances two arguments for why the ITC’s

threat determination is not supported by substantial record

evidence or otherwise in accordance with law.7 For the

7

Plaintiff also advances a third argument that threat of material

injury is likely because the domestic UAN industry was clearly injured

by the subject imports during the period of investigation (contrary to

the ITC’s conclusion). Pl.’s Br. at 45. Since the Court affirms the

ITC’s negative present material injury determination, as discussed

Court No. 03-00260 Page 43

reasons set forth below, the Court sustains this aspect of

the Final Determination.

1. The ITC Considered and Reasonably Weighed the

Record Evidence Concerning Available Capacity.

Plaintiff argues that the ITC erred by not considering

all available capacity data when assessing the likelihood

of future imports. Pl.’s Br. at 46. Specifically,

Plaintiff contends that the ITC ignored: (1) excess

capacity data for the Ukraine and (2) the existence of a

Russian producer with excess capacity who failed to respond

to the final questionnaire. Id. at 46-47.

The Court finds that the ITC adequately considered

available capacity data. First, contrary to Plaintiff’s

contention, the ITC did not focus solely on questionnaire

responses when cumulating capacity estimates. In fact, the

ITC relied on Plaintiff’s own estimate of Ukrainian

capacity when it did not receive adequate questionnaire

responses from importers in that subject country. See

Views of the Commission at 31 n.142 (“Even assuming excess

capacity in the Ukraine, one third of the total capacity in

the Ukraine would only be equivalent to another [ ]

percent of domestic apparent consumption.”); id. at 31

n.143 (“The Ukrainian producers did not respond to the

infra at III.D, this argument is not addressed.

Court No. 03-00260 Page 44

[ITC]’s questionnaires, but petitioners estimate that

production capacity for UAN in the Ukraine is [ ]

short tons.”).

Second, the ITC acted appropriately when it did not

include Plaintiff’s capacity estimate for the Russian

producer who did not respond to the final questionnaire.

Plaintiff provided no record evidence that this producer

had [ ] or was planning to do so in the

future. See Def.’s App., List 2, Doc. 124 (ITC Staff

Report for INV-AA-036 dated Mar. 21, 2003) at VII-3. The

ITC properly declined to consider possible, but

undocumented, excess capacity as evidence of a likely

increase in imports. See 19 U.S.C. § 1677(7)(F)(ii)

(threat determination may not be made “on the basis of mere

conjecture or supposition”); see also BIC Corp. v. United

States, 21 CIT 448, 464, 964 F. Supp. 391, 405 (1997)

(affirmative threat determination requires “positive

evidence tending to show an intention to increase levels of

importation”) (citation omitted).

Accordingly, the ITC’s consideration of available

capacity data was in accordance with law and the resulting

capacity data set provides substantial evidentiary support

for the ITC’s threat determination.

2. The ITC Considered and Reasonably Weighed

Court No. 03-00260 Page 45

Anecdotal Evidence Concerning the Likelihood of

Future High Volume Subject Imports.

Plaintiff argues that the ITC erred by not according

proper weight to Plaintiff’s anecdotal evidence of likely

high volume future imports. Pl.’s Br. at 47.

Specifically, Plaintiff contends that the ITC: (1)

incorrectly interpreted the terms of a key supply contract

between a non-domestic UAN producer and a significant

importer, substantially underestimating the amount of

likely future imports; (2) placed undue emphasis on the

role of high transportation costs in deterring UAN imports,

citing the high volume of imports experienced during the

period of investigation as counterevidence; and (3)

dismissed the significance of EU antidumping measures

imposed on subject imports. Id. at 47-49.

The Court finds that the ITC adequately considered

Plaintiff’s anecdotal evidence of material threat. First,

the ITC’s interpretation of the contested contract,

although questionable, does take into consideration the

fact that the importer was importing more than [

] during the period of investigation.

See Views of the Commission at 33 (“[

Court No. 03-00260 Page 46

]”). Plaintiff offers no evidence to explain why the

contract in question would encourage any importer to bring

substantially more UAN into the U.S. than the significant

amounts imported during the period of investigation. Given

the ITC’s recognition that the significant importer in

question (among others) had imported substantial quantities

of UAN during the period of investigation, the contested

contract did not demonstrate that an increase in subject

imports above this already significant amount was likely or

would likely cause material injury.

Second, the ITC reasonably found that high

transportation costs would deter future UAN imports. In

the Final Determination, the ITC noted that UAN is largely

composed of water and must be transported long distances to

reach key U.S. cities. Views of the Commission at 15. The

ITC also noted that some suppliers even use financial swap

instruments to minimize the effects of high UAN

transportation costs. Id. The ITC found that it was cost-

effective to transport high quantities of subject imports

to the U.S. during the period of investigation only because

UAN prices had reached record highs. Id. at 18. The Court

finds that this conclusion is supported by substantial

Court No. 03-00260 Page 47

record evidence. See, e.g., Def.’s App., List 2, Doc. 108

(ITC Staff Report for INV-AA-031 dated Mar. 11, 2003) at

II-1, V-5, V-7, V-10. It was therefore reasonable for the

ITC to conclude that transportation costs would serve as an

obstacle to future imports as well and to base its threat

determination in part on this finding.

Third, the ITC reasonably accorded little weight to

the significance of EU antidumping measures imposed on

subject imports. Plaintiff’s contention that EU

antidumping measures significantly increased the volume of

subject imports into the U.S. during the period of

investigation and would continue to do so is not supported

by record evidence. The Final Determination notes that

“[n]otwithstanding the EU orders, subject import volumes in

the U.S. market dropped during the latter part of 2001 and

interim 2002.” Views of the Commission at 32. Plaintiff

offers no explanation for why subject imports fell during

the period of investigation despite the continuation of EU

antidumping measures. Rather, as discussed infra at III.B,

the record evidence supports the ITC’s conclusion that the

volume of subject imports tracked natural gas prices and

corresponding UAN prices, rather than EU antidumping

duties.

Accordingly, the ITC’s consideration and treatment of

Court No. 03-00260 Page 48

Plaintiff’s anecdotal evidence concerning threat of

material injury is supported by substantial evidence.

IV. CONCLUSION

For the foregoing reasons, the Court sustains the

Final Determination. Judgment will be entered accordingly.

/s/ Richard W. Goldberg

Richard W. Goldberg

Senior Judge

Date: January 31, 2005

New York, New York