By Eric Schweibenz and John PresperFurther to our August 5, 2016 post, the International Trade Commission (“Commission”) issued its opinion on August 16, 2016 reversing an initial determination (“ID”) suspending the investigation in Certain Carbon Alloy Steel Products (Inv. No. 337-TA-1002).
By way of background, this investigation was instituted based on a complaint filed by U.S. Steel Corporation (“U.S. Steel”) alleging a violation of section 337 by numerous Chinese steel producers and distributors—as well as certain Hong Kong and U.S. affiliates—by reason of: (1) a conspiracy to fix prices and control output and export volumes, the threat or effect of which is to restrain or monopolize trade and commerce in the U.S.; (2) misappropriation and use of trade secrets, the threat or effect of which is to destroy or substantially injure an industry in the U.S.; and (3) false designation of origin of manufacturer, the threat or effect of which is to destroy or substantially injure an industry in the U.S.
On July 6, 2016, ALJ Dee Lord issued, sua sponte, an ID (Order No. 19) suspending the investigation pursuant to section 337(b)(3) and Commission Rule 210.23 “to allow the Commission to provide the statutorily required notice to the Secretary of Commerce” given that the present matter comes at least “in part” within the purview of the antidumping and countervailing duty laws, and due to “the pendency of proceedings before the Secretary of Commerce.” The ID also noted that any response from the Commerce Department or other relevant agencies would aid the ALJ in developing a complete record in the investigation. The Secretary of Commerce sent the Commission a letter on July 11, 2016 that acknowledged the ALJ’s ID to suspend the investigation and identified two investigations that “potentially could come within the scope of the Commission’s investigation.” Both U.S. Steel and the Commission Investigative Staff (“OUII”) petitioned the Commission for review of the ID.
According to the opinion, U.S. Steel raised two issues in its petition for review: (1) whether Order No. 19 erred as a matter of law in suspending the investigation under 19 C.F.R. § 210.23 and 19 U.S.C. § 1337(b)(3) because no related antidumping or countervailing duty (“AD/CVD”) matters are currently pending before the Commerce Department; and (2) whether Order No. 19 erred as a matter of law and fact in suspending this investigation under 19 C.F.R. § 210.23 in order to provide notice of the investigation to the Commerce Department.
After reviewing the origin of Section 337 and the legislative history of paragraph (b)(3), the Commission determined that the first basis for the ID—to provide notice—is not cognizable under the statute or Commission Rule 210.23 because “[s]uspension in section 337(b)(3) does not exist to provide notice to the Secretary of Commerce, but rather to enable the Commerce Department to complete its own Title VII investigations.” The Commission also determined that the second basis for the ID—the pendency of proceedings at the Department of Commerce—is inadequate to support suspension in this particular investigation since “there were no such proceedings pending [before the ALJ], because the investigations identified in the Complaint had been completed.” Regarding the two pending investigations that “potentially could come within the scope of the Commission’s investigation” that were later identified in the letter from the Secretary of Commerce, the Commission determined that “there may be at most a tangential relationship between the two pending proceedings at the Commerce Department and the unfair acts alleged here,” and that the record provided no reason to believe that the delay to the section 337 investigation caused by suspension would be outweighed by the resolution of the pending proceedings conducted by the Department of Commerce.