Far Eastern Textile Ltd. v. United States International Trade Commission

Slip Op. 01-102

UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________

:

FAR EASTERN TEXTILE LTD., :

:

Plaintiff, :

:

v. :

: Court No. 00-06-00296

THE UNITED STATES INTERNATIONAL :

TRADE COMMISSION, : Public

: Version

Defendant, :

:

and :

:

ARTEVA SPECIALTIES S.a.r.l., :

d/b/a KoSa, and WELLMAN, INC., :

:

Defendant-Intervenors. :

___________________________________:

[ITC’s determination of material injury sustained.]

Dated: August 14, 2001

White & Case, LLP (William J. Clinton; Lyle B. Vander Schaaf;

Frank H. Morgan) for plaintiff.

Marc A. Bernstein, Acting Assistant General Counsel, Lyn M.

Schlitt, Office of General Counsel, United States International

Trade Commission, of counsel, (Mary Jane Alves), for defendant.

Collier Shannon Scott, PLLC (Paul C. Rosenthal, Kathleen W.

Cannon, David C. Smith, Jr., and Grace W. Kim) for defendant-

intervenor.

COURT NO. 00-06-00296 PAGE 2

OPINION

RESTANI, Judge:

Far Eastern Textile Ltd. (“Far Eastern”), respondent in the

underlying investigation, moves for judgment on the agency record

pursuant to USCIT Rule 56.2. At issue is the final determination

of the International Trade Commission (the “Commission”) in

Certain Polyester Staple Fiber from Korea and Taiwan, USITC Pub.

3300, Inv. Nos. 731-TA-825 to 826 (final) (May 2000), List 2,

C.R. Doc. 224 [hereinafter “Final Determination”]. Far Eastern

contests the Commission’s affirmative material injury

determination by arguing that its finding of substantial

competition between the foreign imports and the domestic like

product (1) is based on data that was misreported by petitioners

and (2) is not supported by substantial evidence given

dissimilarities among the types of polyester staple fiber

(“PSF”). Far Eastern also contests the Commission’s

determination of price depression.

JURISDICTION & STANDARD OF REVIEW

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

(1994). The Court will uphold the Commission’s determination in

antidumping investigations unless it is “unsupported by

substantial evidence in the administrative record or is otherwise

not in accordance with law.” 19 U.S.C. § 1516a(a)(2)(B)(i).

COURT NO. 00-06-00296 PAGE 3

FACTUAL & PROCEDURAL BACKGROUND

On April 2, 1999, E.I. DuPont de Nemours; Arteva Specialties

S.a.r.l., d/b/a KoSa (“KoSa”); Nan Ya Plastics Corp., America

(“Nan Ya”)1; Wellman, Inc.; and Intercontinental Polymers, Inc.,

filed a petition with the Commission and the Department of

Commerce (“Commerce”) alleging that imports of PSF from the

Republic of Korea and Taiwan are being, or are likely to be, sold

in the United States at less than fair value (“LTFV”), and that

such imports are both materially injuring and threatening further

material injury to an industry in the United States. See Certain

Polyester Staple Fiber From the Republic of Korea and Taiwan, 64

Fed. Reg. 23,053 (Dep’t Comm. 1999) (init. antidumping invest.).2

1

Nan Ya Plastics was not a petitioner in the investigation

involving Taiwan. In a letter dated May 4, 1999, Nan Ya Plastics

also withdrew as a petitioner in the investigation involving

Korea. In the same letter, DuPont withdrew as a petitioner in the

investigation involving Taiwan. See Certain Polyester Staple

Fiber from Korea and Taiwan, USITC Pub. 3197, Inv. Nos. 731-TA-

825 to 826 (prelim.) (May 1999), List 1, P.R. Doc. 61, at 1 n.2

[hereinafter “Preliminary Determination”].

2

In the April 29, 1999 notice of initiation, Commerce’s

definition of the scope of the investigation reads in relevant

part as follows:

Certain polyester staple fiber is defined as synthetic

staple fibers, not carded, combed or otherwise

processed for spinning, of polyesters measuring 3.3

decitex (3 denier, inclusive) or more in diameter. This

merchandise is cut-to-lengths varying from one inch (25

mm) to five inches (127 mm). The merchandise . . . may

be coated, usually with a silicon or other finish, or

not coated. Certain polyester staple fiber is generally

used as stuffing in sleeping bags, mattresses, ski

jackets, comforters, cushions, pillows, and furniture.

COURT NO. 00-06-00296 PAGE 4

The Commission instituted investigations effective the same date.

In May of 1999, the Commission preliminarily determined that

an industry in the United States is “materially injured” by

reason of less-than-fair-value imports of PSF from Korea and

Taiwan. Preliminary Determination at 1. The Commission had

considered whether certain types of PSF, specifically “low-melt

fiber,”3 “conjugate fiber,”4 “fiber made from recycled

materials,” and so-called “regen” fiber,5 should be defined as

separate like products. Id. at 5-11. The Commission found that

there was one domestic like product coextensive with the scope of

64 Fed. Reg. at 23,053.

3

“Low-melt” fiber is described as follows:

a bicomponent fiber comprised of a polyester core and a

sheath of copolymer polyester. Low melt is used to

bind conventional polyester staple fibers together to

form a nonwoven batt suitable for bulk uses such as

furniture stuffing. When heated, the outer copolymer

sheath melts at a lower temperature than its core or

conventional polyester staple fibers, and the melted

sheath acts as a glue, holding the polyester staple

fibers together.

Preliminary Determination at 6.

4

“Conjugate” fiber is described as follows:

a bicomponent fiber, with two polyesters used to create

a curled, or spiraled fiber. This spiral shape

provides characteristics to the conjugate fiber similar

to those that mechanical crimping gives to conventional

polyester staple fiber.

Preliminary Determination at 7-8.

5

“Regen” fiber is described in detail in the discussion

section.

COURT NO. 00-06-00296 PAGE 5

the investigations defined by Commerce, but indicated that it

would revisit the issue in the final phase of the investigation.

Id. at 11.

On October 22, 1999, the Commission solicited comments from

the parties on the draft producer, importer, purchaser, and

foreign producer questionnaires. In its May 15, 2000 final

determination, the Commission determined that two separate

domestic like products exist for merchandise covered by

Commerce's investigation, namely: (1) low-melt PSF and (2) all

other types of PSF not specifically excluded (collectively

designated “conventional PSF”). Final Determination at 3, 12.

The Commission majority found low-melt fiber to be a domestic

like product separate from the other polyester staple fibers, and

issued negative material injury and threat determinations with

respect to the domestic industry producing low-melt PSF. Final

Determination at 6-9, 28-36.6

With respect to “conventional” fiber, however, the

Commission issued an affirmative material injury determination.

Final Determination at 16-28. The Commission noted that for the

purposes of the final phase of the investigation, “respondents no

longer argue that regenerated fiber is a separate domestic like

6

Accordingly, the scope of the antidumping duty orders was

revised from that used in the investigations to exclude low-melt

PSF. See Certain Polyester Staple Fiber from Korea and Taiwan,

65 Fed. Reg. 33,807 (Dep’t of Comm May 25, 2000) (amd’d final

determ.).

COURT NO. 00-06-00296 PAGE 6

product.” Final Determination at 5 n.13. See also Letter from

Stein Fibers, Ltd. to Commission (Feb. 8, 2000), List 2, C.R.

Doc. 46.

On May 25, 2000, Commerce published its antidumping duty

order pursuant to the affirmative final determinations made by

Commerce and the ITC. Certain Polyester Staple Fiber from

Taiwan, 65 Fed. Reg. 33,807 (Dep’t Comm. 2000). Far Eastern

appeals the Commission’s final determinations of material

injury.7

Discussion

I. Material Injury Analysis

Under 19 U.S.C. § 1673d(b)(1), the Commission is charged

with making “a final determination of whether . . . an industry

in the United States (i) is materially injured, or (ii) is

threatened with material injury . . . by reason of imports, or

sales . . . for importation, of the [subject] merchandise.”

Section 1677(7)(B)(i) specifies that the Commission in making its

final material injury determination must consider the volume of

the subject imports, their effect on prices for the domestic like

product, as well as their impact on domestic producers of the

domestic like product.8 Pursuant to 19 U.S.C. § 1677(7)(B)(ii),

7

Far Eastern does not on appeal dispute the Commission’s

domestic like product determination.

8

Before engaging in this analysis, however, the Commission

must “cumulatively assess the volume and effect of imports of the

COURT NO. 00-06-00296 PAGE 7

the Commission may also "consider such other economic factors as

are relevant to the determination." No single factor, however,

is determinative and the Commission evaluates all relevant

economic factors "within the context of the business cycle and

conditions of competition that are distinctive to the affected

industry." 19 U.S.C. § 1677(7)(C).

Far Eastern contests the Commission’s affirmative material

injury determination by arguing that its general conclusion that

foreign imports compete with the domestic like product (1) was

based on “flawed” data regarding “regenerated fiber” and (2) was

not supported by substantial evidence. Far Eastern also contests

the Commission’s finding that underselling by subject imports

contributed to price depression.

A. Reliance on Questionnaire Responses

Far Eastern argues that the Commission unreasonably relied

on “flawed” data reported by the domestic producers regarding

their shipments of “regenerated fiber.”9 Far Eastern’s

subject merchandise from all countries with respect to which ...

petitions were filed . . . on the same day . . . if such imports

compete with each other and with domestic like products in the

United States market.” 19 U.S.C. § 1677(7)(G)(i). Far Eastern

does not directly challenge cumulation of data on the foreign

imports. Rather, it challenges the Commission’s finding that

foreign imports compete with the domestic like product insofar as

the finding underlies the ultimate material injury determination.

9

Far Eastern also challenges the Final Determination on the

ground that data reported by [ ] was found to have errors.

COURT NO. 00-06-00296 PAGE 8

contention that the data is “flawed” rests on the proposition

that petitioners ignored part of the definition given by the

Commission and reported as “regenerated fiber” what

“admittedly”10 should have been classified as “residual PSF.”11

This alleged misreporting, Far Eastern concludes, resulted in

distorted volume levels and skewed pricing comparisons that

formed the basis for the Commission’s conclusion that there was

substantial competition between the subject imports and the

domestic like product. Far Eastern Br. at 11. Far Eastern’s

arguments lack merit.

Far Eastern misconstrues the Commission’s definition of

“regenerated PSF.” The category “regenerated fiber” was defined

The Commission noted in the Final Determination, however, that

the errors were corrected pursuant to verification. Final

Determination at 28, n.123; Verification Report (April 18, 2000)

List 2, C.R. Doc. 232. Verifiable data were incorporated in the

final staff report. Memorandum INV-X-087, List 2, C.R. Doc. 38,

at VI-1 [hereinafter “Final Report”]. Data that were ultimately

unverifiable were clearly distinguished in the Final Report. See

Final Report at VI-11 to 13. In light of such clear

distinctions, the court cannot accept Far Eastern’s contention

that the Commission disregarded accurate figures in favor of data

known to be unverifiable.

10

Far Eastern cites and the record reveals no evidence that

the domestic industry “admitted” that the product it reported in

the regenerated fiber category did not in fact meet the

Commission’s definition of this term.

11

The designation “residual” PSF does not refer to a

category defined in the questionnaires. Rather, “residual” PSF

refers to what the Commission in the Final Determination labeled

any conventional PSF (i.e., certain PSF excluding “low-melt”

fiber) that did not satisfy the definition for either regenerated

or conjugate fiber.

COURT NO. 00-06-00296 PAGE 9

in the Commission’s instruction booklet as follows:

polyester staple fiber produced primarily from waste

polyester fibers but may also include other polyester

waste products such as non-fiber polyester solids. It

generally has inconsistent physical properties, such as

irregular color, denier, staple length, and crimp

court. It is generally sold without specifications,

guarantees, or warranties of any kind.

General Information, Instructions and Definitions for Commission

Questionnaires, Inv. Nos. 731-TA-825 to 826 (final) at 4, Far

Eastern Reply App., Tab 1, at 7 [hereinafter “Instructions”].

First, by its terms, the first sentence provides the only

absolute requirement to meet the definition. Thus, producers

were to report as “regenerated fiber” any PSF that primarily had

been regenerated from waste polyester staple fiber itself or

primarily was made from non-fiber (i.e., recycled) materials.12

The evidence supports the finding that domestic producers did in

fact manufacture PSF produced primarily from waste polyester

fibers or other polyester waste products during the POI, and

12

The Final Report clarified that certain PSF can be

classified according to raw materials as follows:

Staple fiber may be made from reacting ethylene glycol

and either terephthalic acid or its methyl ester; if so

produced, it is termed virgin PSF. Staple fiber may

also be made from recycled polyester, using either

consumer waste, such as polyethylene terephthalate

(PET) bottles, or industrial waste, such as polyester

chips or spun tow; such fiber is known as regenerated,

or recycled fiber.

Final Report at I-4.

COURT NO. 00-06-00296 PAGE 10

accurately reported this data to the Commission.13 See Letter to

Jozlyn Kalchthaler from Petitioners, April 11, 2000, KoSa’s App.,

Tab 6.

Second, Far Eastern ignores the use of the qualifier

“generally” with respect to the latter parts of the definition.

There is no support for the proposition that, in drafting

definitions, the Commission is prohibited from including

descriptive terms that indicate factors to be considered in

completing the questionnaire. The use of qualifiers indicates

that although the attributes that follow (e.g., inconsistent

physical properties, irregular color) factor into whether a

particular product can be deemed to fall within the definition,

the lack of such an attribute would not necessarily eliminate a

product from the category. This is not to say that the latter

part of the definition is meaningless and can be ignored.

Rather, it shows that for the purposes of the questionnaire, the

category “regenerated PSF” was intended to encompass what had

13

The Final Report stated that “[p]etitioners manufacture

PSF from polyester waste material, including tow waste, scraps,

filaments, polyester film, and PET bottles.” Final Report at I-

12 & n.35. The Final Report specified that [

].” Id. Far Eastern does not dispute these findings.

COURT NO. 00-06-00296 PAGE 11

been referred to in the preliminary determination as U.S.

produced “recycled fiber” and Korean “regen.”

Far Eastern’s “flawed data” argument is essentially a

belated attempt to convince the Commission that a separate

category for “recycled PSF” should have been included in the

questionnaire. In the preliminary phase of the investigations,

the Commission had analyzed product distinctions in four

categories: “low-melt PSF,” “conjugate PSF,” “PSF made from

recycled materials” and “regen PSF.”14 The distinction between

the latter two categories derived from an acknowledged difference

in inputs, rather than any inherent difference in physical

composition, end-uses, or any other factor used in determining

like product.15

Several respondents, not including Far Eastern, proposed

definitions of “regenerated fiber,” “low-melt fiber,” and

14

The category “regen” was described in the Preliminary

Determination as follows:

Regen is made exclusively from recycled or regenerated

materials, but is chemically identical to conventional

polyester staple fiber. Asian producers of regen tend

to be small firms, generally using inferior quality

equipment. The resulting regen polyester staple fiber

tends to be of a lower quality than conventional fiber;

regen has uneven coloration and inconsistent sizing and

may contain large chips of unprocessed polyester.

Preliminary Determination at 10.

15

Thus, conjugate fiber can be produced from regenerated

fiber or non-regenerated fiber. See Final Results at 22 n.88.

COURT NO. 00-06-00296 PAGE 12

“conjugate fiber” to be included with the questionnaires. One

respondent specifically proposed that, for the purposes of the

questionnaire, “regenerated fiber” be distinguished from

“recycled fiber,” which it described as a PSF “comparable in

quality and interchangeable with virgin polyester staple fiber

but using as its raw material recycled products made from

polyethylene terephthalatate (“PET”) such as soda bottles instead

of newly manufactured PET chip.” Commission App., List 1, P.R.

Doc. 80, at 3. The proposed definition for “regenerated PSF” was

as follows:

certain polyester staple fiber . . . produced primarily

from waste polyester fibers, or other polyester waste

product. It is typically off color, and may consist in

part of non-fiber polyester solids such as unprocessed

pieces of the waste feedstock. It is generally sold

without specifications, guarantees, or warranties of

any kind.

Id.

In a letter dated November 1, 1999, petitioners disputed the

grounds for the proposed distinction, arguing, inter alia, that

inputs used to create “recycled” and “regenerated” fibers can be

and are in fact combined to produce a single resulting fiber.

Commission App., List 1, P.R. Doc. 88, at 4-5. The questionnaire

ultimately adopted a definition of regenerated fiber that was

similar to that proposed by respondents, but rejected “recycled

fiber” as a separate category. See Instructions, at 4, Far

Eastern Reply App., Tab 1, at 7. Such a grouping of markets

COURT NO. 00-06-00296 PAGE 13

segments is proper. See Makita Corp. v. United States, 974 F.

Supp. 770, 788 (Ct. Int’l Trade 1997) (“[N]either the statute nor

its legislative history requires the Commission to adopt a

particular analysis when the market has segments.”) (citation

omitted). See also BIC Corp. v. United States, 21 CIT 448, 453,

964 F. Supp. 391, 397 (1997)(“[W]hen it has reviewed

determinations in which the Commission has considered using

market segments, the court has deferred to the Commission’s

findings regarding the existence and importance of such

segments.”) (citing Acciai Speciali Terni, S.p.A. v. United

States, 19 CIT 1051 (1995)). Thus, the single category

“regenerated PSF” with broad descriptive terms was apparently

intended to include what had been referred to as “regen” and

“recycled fiber” to account for the lack of a clear dividing line

given the practice of blending the two types of fibers. Far

Eastern may not now obtain remand on the ground that the

Commission was wrong in not fully accepting a co-respondent’s

arguments. If Far Eastern had more persuasive arguments, it

could have made them at the appropriate time, but elected not to

do so.

In fact, the record shows that Far Eastern did not always

distinguish between PSF made from recycled material and PSF made

from PSF waste. In the Commission’s January, 2000 sales

verification at Far Eastern’s corporate headquarters, company

COURT NO. 00-06-00296 PAGE 14

officials represented that “[Far Eastern] does not differentiate

in the ordinary course of business between regenerated and

recycled inputs. Rather, they refer to all non-virgin inputs as

‘waste.’” Far Eastern Sales Verification Report (Feb. 11, 2000),

at 11, Commission App., List 2, C.R. Doc. 16, Exh. 2, at 2. In

its appeal, Far Eastern does not dispute that such

representations were made to the Commission. The Commission

properly relied on data that had been derived from reporting

according to definitions consistent with these representations.

B. Substitutability

The Commission’s affirmative material injury determination

with respect to “conventional fiber” was based in part on a

threshold finding that “conjugate fiber and regenerated fiber

compete to a substantial degree with all other conventional PSF

([designated] ‘residual PSF’) in the U.S. conventional PSF

market.” Final Determination at 19. See BIC, 964 F. Supp. at

398 (“In analysis of material injury, substitutability is one

factor in the evaluation of volume and price.”) (citation

omitted). Far Eastern contends that the underlying finding of

fungibility was not based on substantial evidence.

The Commission first acknowledged that “conjugate and

regenerated fiber may substitute for non-PSF products [such as

goose-down for “conjugate,” and foam and shoddy (i.e., reclaimed

COURT NO. 00-06-00296 PAGE 15

wool) for “regenerated fiber”] to some extent.” Final

Determination at 21-22. The Commission nonetheless made three

findings to conclude that there was “a large degree of

fungibility and direct competition between both of the types of

imported fiber [i.e., “conjugate PSF” and “regenerated PSF”] and

domestically produced PSF.” Id. at 22.16 These findings related

to the following product and industry characteristics: (1)

blending among types of conventional PSF; (2) product end-use;

and (3) interchangeability of conjugate fiber and regenerated

fiber with other certain PSF.

1. Blending

The Commission’s fungibility determination was based in part

on a finding that “purchasers’ blending practices indicate that

there are different mixtures of PSF that will result in the

desired end-product.” Final Determination at 22. The Commission

reasoned as follows:

Purchasers appear to be able to shift their blends to

16

To the extent the Commission relies on substitutability

in its material injury determination, the products in question

need not be direct substitutes, but they must be substantially --

rather than theoretically -- substitutable. See R-M Indus., Inc.

v. United States, 18 CIT, 219, 226 n.9, 848 F. Supp. 204, 210

n.9, 211 (1994) (noting differences among contexts in which

substitutability arises and holding that “[s]ection

1677(7)(C)(ii) permits a finding of injury where an imported

product of higher quality may not be directly substitutable but

nonetheless causes price depression or suppression for the lower

cost domestic product”).

COURT NO. 00-06-00296 PAGE 16

take account of differences among the types of

conventional PSF. For example, purchasers may use

greater quantities of lower-priced regenerated fiber

and lesser quantities of other types of fiber to

achieve a low price point. However, in such

situations, it is price concerns that drive the

blending decision.

Id. at 22. Far Eastern concedes that purchasers may blend

different types of PSF in different proportions. Far Eastern

maintains, however, that blending occurs because the different

types of PSF “complement” rather than displace one another, as a

result of marked quality differences among the types.17 Although

different proportions of types of PSF render the blend suitable

for different grades of applications (e.g., high-end furniture

vs. low-end furniture), this does not negate the fact that, as

the record shows, purchasers attempt to reach a lower price-point

on a product by substituting one type for another.18 Final

Report at II-11, 14-15. That the types are used in varying

17

Rather than cite to specific record evidence to support

its theory that the types of PSF complement each other, Far

Eastern relies on analogy. Because blending is according to

specific formulae, Far Eastern likens the types of PSF to

different ingredients in making a cake, i.e. flour and sugar.

This analogy necessarily fails because although the different

types of PSF have varying levels of quality, they provide

essentially the same ultimate function, e.g., filler, unlike

different ingredients in a recipe.

18

For example, Patrick J. Magrath, one of petitioners’

economic consultants, testified that “[t]here is pressure from

[purchasers’] end-users to hit certain price points, but it’s

also for them to lower their costs and maintain their profit

margins, so [blending is] driven by that. . . .” Final Hearing

Transcript (Mar. 28, 2000), List 1, P.R. Doc. 251, Far Eastern

App., Tab 2, at 65.

COURT NO. 00-06-00296 PAGE 17

proportions supports the conclusion that the types are

substitutes to a certain degree rather than complements.

Because a purchaser may change the proportion of PSF types in

order to meet a certain price point and still satisfies a demand

for a particular end-use, the Commission’s finding of competition

on this ground is supported by substantial evidence. See Mukand

Ltd. v. United States, 20 CIT 903, 904, 937 F. Supp. 910, 912-13

(1996) (finding of competition supported by substantial evidence

where low-priced subject merchandise is used in place of domestic

like product for applications in which quality is not critical).

2. End-use

The Commission found that

respondents have failed to identify a significant

market segment or end-use served by regenerated fiber

or conjugate fiber that is not served by residual PSF.

The large volume of imports of conjugate fiber and

regenerated fiber indicates that they are not serving

niche markets, but rather are competing to a large

degree with residual PSF.

Final Determination at 22. Although it is questionable whether

the Commission can determine solely from volume figures whether a

product serves a niche market or not, the Commission’s finding

regarding competition on the ground of similar end-use is

supported by substantial evidence. The Final Report states that

“PSF is principally used as fiberfill and is seldom visible. . .

. The majority of the subject fiber is used as stuffing in

COURT NO. 00-06-00296 PAGE 18

sleeping bags, mattresses, ski jackets, comforters, cushions,

pillows, and furniture. PSF used for fill is produced in many

variations for purposes of quality enhancement.” Final Report at

I-3. See also id. at I-7 (conjugate fiber end uses) and I-11 to

12 (regenerated fiber end uses). Far Eastern does not dispute

that all types of conventional PSF (i.e., certain PSF excluding

“low melt PSF,” which was found to serve primarily as a bonding

agent) are used as fiberfill, nor is there any testimony to the

contrary. Rather, Far Eastern asserts that the different types

of PSF correspond to different quality levels of end-uses. The

record supports Far Eastern’s statement that, in contrast to

regenerated fiber, conjugate fiber is generally “a

technologically advanced product suitable for high-end uses, with

better filling power and shape retention.” Final Determination

at 10; Final Report at I-7, II-5 to 8. The varying degrees of

quality within certain types of end-uses, however, does not

render unsupported by substantial evidence the Commission’s

conclusion that all conventional PSF is used for the similar

purposes described in the Final Report.

3. Interchangeability

The Commission relied on pricing data and questionnaire

responses to make an underlying finding of interchangeability

between subject imports of conventional PSF and the domestic like

COURT NO. 00-06-00296 PAGE 19

product. Final Determination at 22-23. Far Eastern disputes

this finding, arguing that “the evidence does not support, and

often contradicts, the Commission’s finding that subject imported

conjugate and regenerated fiber are substitutable and compete

with domestically produced conventional PSF.” Far Eastern Br. at

17.

The Commission first found that the “the pricing data do not

support the argument that conjugate fiber is superior to residual

PSF.” Final Determination at 22. Far Eastern attacks this

finding indirectly by asserting that a comparison between

conjugate fiber and conventional PSF is of limited probative

value because “domestic producer’s sales are concentrated in so-

called ‘residual PSF’ and higher-quality recycled fibers.” Far

Eastern Br. at 13. Simply because the volume of conjugate

produced in the United States was minimal does not necessarily

establish that pricing data for conjugate is unreliable so as to

preclude the Commission from making a comparison between

conjugate and other types of fiber. Minimal U.S. production of a

product sub-type does not undercut the Commission’s overall

material injury determination where, as here, the sub-type

represents a low percentage of total U.S. consumption of the

subject merchandise. Indeed, that a domestic producer did

produce one type of conjugate fiber (5-7 denier, hollow, slick)

during the POI -- and is capable of shifting capacity to produce

COURT NO. 00-06-00296 PAGE 20

more -- is evidence of direct competition, even if to a limited

extent, and therefore supports the Commission’s finding of

interchangeability.19

The Commission further found that “a significant number of

importers and purchasers indicated that conjugate fiber and other

certain PSF are interchangeable or somewhat interchangeable.”

Final Determination at 22-23. The Commission noted that “[f]our

[of four] domestic producers, four of fourteen importers, and

nine of thirty purchasers reported that conjugate fiber is

interchangeable with other certain PSF,” while “[t]wo importers

and five purchasers reported that conjugate fiber is somewhat

interchangeable with other certain PSF.” Final Determination at

23, n. 93 (citing Final Report at II-5 to II-8). The Commission

also found that:

the bulk of the questionnaire responses . . . indicate

that purchasers buy regenerated fiber because it is

less expensive. Therefore, in the absence of low-

priced regenerated fiber, many purchasers would likely

buy residual PSF. A majority of importers and

purchasers indicated that regenerated fiber and

residual PSF are interchangeable or somewhat

interchangeable.

19

The Final Report noted that [ ] is the only domestic

producer that has produced conjugate. Final Report at V-13,

Table V-5. Consumption of conjugate fiber “increased

significantly, by [ ] percent in quantity and [ ] percent

in value, during 1997-99. Final Report at IV-11, Table IV-6. [

] represented to the Commission that it had discontinued

production of conjugate as of March 2000, but that it planned to

start producing again if market conditions improve. Final Report

at V-13, Table V-5.

COURT NO. 00-06-00296 PAGE 21

Final Determination at 23. In support of its determination, the

Commission noted that all four domestic producers, five of

fifteen importers, and fifteen of thirty-eight purchasers

reported regenerated fiber to be “interchangeable” with other

certain PSF. In addition, three importers and five purchasers

considered regenerated fiber to be “somewhat interchangeable”

with other certain PSF.” Final Determination at 23 n.94 (citing

Final Report at II-11 to 15).20

A review of the comments given in response to the

questionnaires reveals that the figures for both conjugate and

regenerated fiber are accurate, yet because the results are

mixed, the evidence appears inconclusive with respect to

interchangeability. Nevertheless, where results are mixed, the

Court may not remand a determination by the Commission simply

because the evidence on the record may support two inconsistent

conclusions. See Grupo Industrial Camesa v. United States, 85

F.3d 1577, 1582 (Fed. Cir. 1996) (citing Consolo v. Fed. Mar.

Comm’n, 383 U.S. 607, 619-20 (1966)). Thus, the Commission’s

20

Far Eastern maintains that conjugate fiber is a superior

product that competes primarily with non-PSF products, especially

goose down. That conjugate fiber competes with non-PSF products

does not speak to the issue of whether a purchaser would be able

to substitute other types of PSF if the price of conjugate were

to increase substantially. Far Eastern offers no support for its

assumption that differences in quality necessarily indicate that

purchaser quality preferences are of such an extent that

substitution would not take place regardless of any price

differential.

COURT NO. 00-06-00296 PAGE 22

finding of a significant degree of interchangeability for both

conjugate and regenerated fiber is supported by substantial

evidence.

C. Price Effects

The Commission determined a significant volume of

underpriced subject imports of conventional PSF from Korea and

Taiwan can and did contribute to a significant degree to price

depression. Final Determination at 24-26; 19 U.S.C. §

1677(7)(C)(ii). The Commission found that “[t]he cumulated

imports of conventional PSF from Korea and Taiwan undersold the

domestic product in 162 out of 168 quarterly observations, or

96.4% of the time.” Final Determination at 25. The Commission

also found, inter alia, that prices of subject imports of

conventional PSF declined overall from 1997 to 1999. Id. Rather

than directly contesting the Commission’s finding of

underselling, Far Eastern contends that the Commission erred in

not attributing the price decline to a decrease in material

costs. Far Eastern, however, overlooks the fact that prices

declined at a faster rate than did costs.21 Furthermore, Far

Eastern has not pointed to any record evidence that would

21

Prices declined by 7.1% from 1997 to 1998, and by 13.8%

from 1998 to 1999, while raw material costs declined by 6.3% from

1997 to 1998, and 10% from 1998 to 1999. See Final Report at

Table VI-3.

COURT NO. 00-06-00296 PAGE 23

controvert the Commission’s observation that prices are not

directly based on material costs.22 Although Far Eastern is

correct -- and the Commission recognized -- that there is in fact

some correlation between raw material prices and the domestic

prices of PSF, see Final Report at Figures V-2 to 7, this

correlation is not of itself sufficient to exclude underselling

by subject imports as a cause of price depression.

II. Alleged Inconsistency between Material Injury Determinations

Far Eastern argues that the Commission’s analysis and

conclusions as to “low-melt” PSF are inconsistent with its

analysis and conclusions with respect to conventional PSF. The

record does not show any such inconsistency. The Commission

determined that there was a lack of interchangeability between

imported and domestically-produced “low-melt” PSF based on

physical differences, different end-uses, and responses by

purchasers and importers to the questionnaire. Final

Determination at 28-32. This determination was not, as Far

Eastern claims, predicated on a finding that no lost sales or

lost revenue allegations involved low-melt PSF.

Far Eastern asserts that Commissioner Bragg failed to

articulate the data and reasoning underlying her determination

22

Far Eastern concedes the lack of evidence of contracts

that establish price terms according to raw material prices. See

Far Eastern Br. at 36.

COURT NO. 00-06-00296 PAGE 24

that there was one domestic like product including “low-melt”

PSF. Where a majority of the commissioners render affirmative

determinations that are, as here, deemed supported by substantial

evidence and are in accordance with law, the Court need not reach

the propriety of a concurring commissioner’s determination, as

the ultimate determination would not be disturbed in any event.

Conclusion

The Commission’s final determination of material injury with

respect to conventional PSF was not based on flawed data and was

supported by substantial evidence. Accordingly, the Commission’s

determination is sustained.

_______________________

Jane A. Restani

Judge

DATED: New York, New York

This 14th day of August, 2001