WALLACH, Circuit Judge.
Swiff-Train Co., Metropolitan Hardwood Floors, Inc., BR Custom Surface, Real Wood Floors, LLC, Galleher Corp., and DPR International, LLC (collectively, "Appellants" or "U.S. Importers") appeal the opinion and final judgment of the United States Court of International Trade ("CIT") affirming the United States International Trade Commission's (the "Commission") finding of material injury to a domestic industry. See Swiff-Train Co. v. United States (Swiff-Train II), 999 F.Supp.2d 1334 (Ct. Int'l Trade 2014); Swiff-Train Co. v. United States (Swiff-Train I), 904 F.Supp.2d 1336 (Ct. Int'l Trade 2013). Because the Commission's remand determination was supported by substantial evidence and is in accordance with law, this court affirms.
After receiving antidumping and countervailing duty petitions from Appellee the Coalition for American Hardwood Parity (the "Coalition"),
Pursuant to 19 U.S.C. §§ 1671d(b) and 1673d(b) (2006), in the investigation the Commission sought to determine whether the domestic multilayered wood flooring industry was materially injured by reason of less-than-fair-value and subsidized subject imports from China. Initial Views at 1. Upon completing its investigation in November 2011, the Commission made an affirmative injury determination. Id. at 36.
U.S. Importers challenged the Commission's final affirmative injury decision before the CIT. In Swiff-Train I, the CIT remanded four issues to the Commission, including "whether the subject imports were a `but-for' cause of material injury to the domestic industry," and affirmed all other aspects of the Commission's determinations. Swiff-Train I, 904 F.Supp.2d at 1338. Specifically, as to causation, the CIT found the Commission's determinations to be "unsupported by substantial evidence because the Commission failed to adequately consider the effect that the severe disruption of the home building and remodeling industries had on the domestic
On remand, the Commission reopened the record and solicited written comments from Appellants and other parties. On September 30, 2013, the Commission submitted its determinations on remand to the CIT, wherein it continued to find the domestic industry was materially injured by reason of subject imports. See Multilayered Wood Flooring from China (Remand), Inv. Nos. 701-TA-476, 731-TA-1179, Pub. 4430, 2013 WL 5918769 (Int'l Trade Comm'n Sept. 30, 2013) (J.A. 942-86) ("Remand Views"). Specifically, the Commission concluded after an extensive analysis, "but for the unfairly traded subject... imports from China in the U.S. market during the [period of investigation], the domestic industry would have been materially better off both during the housing market collapse and during the developing recovery that followed." Id. at 47.
On December 20, 2013, U.S. Importers submitted their objections to the Remand Views to the CIT, arguing the Remand Views did not comply with the court's remand order in Swiff-Train I to apply a "but-for" causation standard. On July 16, 2014, in Swiff-Train II, the CIT sustained the material injury determination, finding the Remand Views complied with its remand order. Swiff-Train II, 999 F.Supp.2d at 1340. The CIT found the Commission "properly framed the legal basis upon which to determine whether subject imports are the cause-in-fact of material injury, to wit, `notwithstanding any injury from other factors,'" which the CIT characterized as "an obvious expression of a `but for' cause-in-fact inquiry." Id. at 1344.
Appellants appealed to this court on September 8, 2014. This court has jurisdiction under 28 U.S.C. § 1295(a)(5) (2012).
This court reviews decisions of the CIT de novo, "apply[ing] anew the same standard used by the [CIT]." Mittal Steel Point Lisas Ltd. v. United States, 548 F.3d 1375, 1380 (Fed.Cir.2008) (internal quotation marks and citation omitted). Under that standard, this court must uphold the Commission's determinations unless they are "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i) (2006); see also Gerald Metals, Inc. v. United States, 132 F.3d 716, 719 (Fed.Cir.1997) ("This court duplicates the [CIT's] review of the Commission's determinations, evaluating whether they are `unsupported by substantial evidence on the record, or otherwise not in accordance with law.'" (quoting 19 U.S.C. § 1516a(b)(1)(B)(i))). "Although such review amounts to repeating the work of the [CIT], we have noted that `this court will not ignore the informed opinion of the [CIT].'" Diamond Sawblades Mfrs. Coal. v. United States, 612 F.3d 1348, 1356 (Fed. Cir.2010) (quoting Suramerica de Aleaciones Laminadas, C.A. v. United States, 44 F.3d 978, 983 (Fed.Cir.1994) ("Although
Substantial evidence is defined as "more than a mere scintilla," as well as evidence that a "reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. of N.Y. v. NLRB, 305 U.S. 197, 217, 59 S.Ct. 206, 83 L.Ed. 126 (1938). This court's review is limited to the record before the Commission in the particular proceeding at issue and includes all evidence that supports and detracts from the Commission's conclusion. Sango Int'l L.P. v. United States, 567 F.3d 1356, 1362 (Fed.Cir.2009). An agency finding may still be supported by substantial evidence even if two inconsistent conclusions can be drawn from the evidence. Consolo v. Fed. Mar. Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966).
The United States imposes duties on foreign-produced goods sold in the United States at less-than-fair value ("antidumping duties"), 19 U.S.C. § 1673(1), or that benefit from subsidies provided by foreign governments ("countervailing duties"), id. § 1671(a)(1). Commerce is responsible for investigating whether there have been, or are likely to be, sales at less-than-fair value or whether a countervailable subsidy has been provided, while the Commission determines whether "an industry in the United States ... is materially injured, or... is threatened with material injury ... by reason of imports" of the subject merchandise. Id. §§ 1671d(a)(1), (b)(1), 1673d(a)(1), (b)(1) (emphasis added). "If both inquiries are answered in the affirmative, Commerce issues the relevant antidumping and countervailing duty orders." Duferco Steel, Inc. v. United States, 296 F.3d 1087, 1089 (Fed.Cir.2002).
An affirmative material injury determination by the Commission "requires both (1) present material injury and (2) a finding that the material injury is `by reason of' the subject imports." Gerald Metals, 132 F.3d at 719. Section 1677(7)(A) defines "material injury" as a "harm which is not inconsequential, immaterial, or unimportant." 19 U.S.C. § 1677(7)(A). When determining whether imports have caused material injury to a domestic industry, the Commission evaluates:
Id. § 1677(7)(B)(i) (emphases added); see also id. § 1677(7)(C)(i)-(iii). The Commission "may [also] consider such other economic factors as are relevant to the determination." Id. § 1677(7)(B)(ii). No single factor is dispositive and the Commission considers all relevant factors "within the context of the business cycle and conditions of competition that are distinctive to the affected industry." Id. § 1677(7)(C)(iii).
Beyond enumerating these factors (i.e., volume of subject imports, their price effects, and their impact on the domestic industry), the statute does not define the phrase "by reason of." See Mittal Steel,
Appellants argue the Commission erred in failing to conduct a counterfactual analysis to determine whether the subject imports were a "but-for" cause of material injury to the domestic industry. Under the proper but-for test, Appellants contend, the Commission is required "to conduct an analysis comparing the actual state of the domestic industry during the Period of Investigation ... with what the state of the industry would have been absent the subject imports." Appellants' Br. 27. Appellants assert such an inquiry is required by the words of the statute: "A `but-for,' counterfactual analysis is the minimum requirement for a finding of causation where a statute is phrased in terms of an injury `by reason of' a particular intervention, as the antidumping and countervailing duty statutes are defined in this case." Id. at 16. This is because, Appellants argue, "[t]he words `by reason of' are pervasively understood to mean `on account of' or `because of.' This type of statutory language fundamentally requires proof that the subject imports were a `butfor' cause of material injury." Id. at 20-21; see also id. at 21 ("[T]he statutes impose a causation standard that requires the Commission to ask whether the domestic [multilayered wood flooring] industry would be in the same position today if the Chinese imports were not in the marketplace during the [period of investigation].").
In support, U.S. Importers point to United States Supreme Court cases from various legal contexts that discuss the statutory use of the terms "because of" and "by reason of." They argue the "Court has repeatedly recognized, across multiple legal contexts, that this type of statutory language requires `but-for' causation." Id. at 22-23. Appellants also claim support from Justice Kennedy's dissent in Price Waterhouse v. Hopkins, where he wrote: "Any standard less than but-for ... simply represents a decision to impose liability without causation." See Price Waterhouse v. Hopkins, 490 U.S. 228, 282, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989) (Kennedy, J., dissenting), superseded by statute, Civil Rights Act of 1991, Pub.L. No. 102-166, § 107(a), 105 Stat. 1075 (codified at 42 U.S.C. § 2000e-2(m)) (dispensing with but-for causality), as recognized in Burrage v. United States, ___ U.S. ___, 134 S.Ct. 881, 889 n. 4, 187 L.Ed.2d 715 (2014).
Appellants also contend a but-for test is required by this court's cases. Citing Gerald Metals and Bratsk Aluminium Smelter v. United States, U.S. Importers argue "this Court has expressly held that `the antidumping statute mandates a showing of causal ... connection between the [less-than-fair-value] goods and the material injury.'" Appellants' Br. 24-25 (quoting Gerald Metals, 132 F.3d at 720) (citing Bratsk Aluminium Smelter v. United States, 444 F.3d 1369, 1373 (Fed.Cir.2006)). Appellants also cite this court's decision in Mittal Steel, where we stated "we regard the inquiry into `but for' causation as a proper part of the Commission's responsibility to determine whether the injury to the domestic industry is `by reason of' the subject imports." Mittal Steel, 542 F.3d at 877. Appellants argue this court in Mittal Steel articulated the proper analysis, based
Id. at 876 (quoting Price Waterhouse, 490 U.S. at 240, 109 S.Ct. 1775).
Finally, U.S. Importers point to several older Commission investigations where the Commission employed certain economic models ("CADIC" and "COMPAS") to perform a counterfactual "but-for" determination. Appellants argue the Commission previously used these economic models to construct a hypothetical state of the industry, as they argue is required by Mittal Steel. Appellants acknowledge the Commission ceased using these models in the early 2000s, but argue the Commission "must still establish that the imports are a `but-for' `legal cause' of injury to the U.S. industry." Appellants' Br. 33; see also id. ("[C]ertain Commissioners apparently do not favor rigorous but-for methodologies, such as CADIC and then its mathematically identical successor, COMPAS, as they threaten the Commissioners' discretion to make an unfettered injury decision, unfettered of the statutory requirement to undertake a counterfactual analysis based on record evidence."). While Appellants acknowledge this court does not require use of any particular model or methodology, they contend the former use of such models supports their argument that a strict counterfactual analysis is required by statute.
The Commission performed a proper but-for analysis in making its affirmative injury determination and fully complied with applicable law. Specifically, the Commission considered the statutory factors of the volume of subject imports, their price effects, and their impact on the domestic industry, 19 U.S.C. § 1677(7)(B)(i), and found substantial record evidence established a causal link between subject imports and material injury to the domestic industry, Remand Views at 47. The Commission considered the role of other factors in the market that may have injured the domestic industry, and concluded these factors did not break the causal link between subject imports and material injury to the domestic industry. Remand Views at 42-47. Based on these findings, the Commission concluded:
Id. at 47. Having established cause-in-fact by identifying the injurious effect of subject imports on the domestic industry using the statutory factors, and then ensuring injury was not caused by factors other than subject imports, the Commission also demonstrated that subject imports were a but-for cause of injury to the domestic industry. See id. The Commission was not then required to conduct an explicit counterfactual test to determine the hypothetical condition of the domestic industry but for the subject imports where the actual data on the record enabled the Commission to conduct a reasonable causation analysis.
As to Appellants' citations to various tort and criminal law statutes containing the terms "because of" or "by reason of," which the Supreme Court has stated require but-for causation, Appellants are correct the Commission is required to demonstrate causation under the trade statutes. There is no support, however, for U.S. Importers' assertion that a strict counterfactual analysis is required. As Appellees point out, "where Congress has required a counterfactual analysis by the Commission to satisfy a statutory threshold under the antidumping and countervailing duty law, it has explicitly told the Commission to perform that analysis." United States' Br. 41-42. This is evident from the Statement of Administrative Action ("SAA") of the Uruguay Round Agreements Act, which states:
SAA, H.R.Rep. No. 103-316, vol. 1, at 883-84 (1994), reprinted in 1994 U.S.C.C.A.N. 4040, 4209. (emphases added).
Furthermore, nowhere in the three related cases relied upon by Appellants — Mittal Steel, Bratsk, and Gerald Metals — did this court rule the "by reason of" standard can only be met by an explicit counterfactual analysis. By contrast, in Mittal Steel this court stated, "[i]n making its determination as to whether the harm to the domestic injury occurred `by reason of' the [less-than-fair-value] imports, the Commission [is] required to `examine the relevant data and articulate a satisfactory explanation for its action.'" 542 F.3d at 873 (citation omitted). Then, "[i]n reviewing an affirmative injury determination for substantial evidence, this court requires evidence in the record `to show that the harm occurred by reason of the [less-than-fair-value] imports, not by reason of a minimal or tangential contribution to material harm caused by [less-than-fair-value] goods.'" Id. (quoting Gerald Metals, 132 F.3d at 722).
Appellants are correct, however, that in Mittal Steel, this court also stated that "[a]n important element of the causation inquiry — not necessarily dispositive, but important — is whether the subject imports are the `but for' cause of the injury to the domestic industry." Id. at 876; see also id. at 877 ("[W]e regard the inquiry into `but for' causation as a proper part of the Commission's responsibility to determine whether the injury to the domestic industry
Id. at 876 (emphasis added). Appellants have not shown this statement prescribes a fixed methodology that applies in this case. Indeed, in Mittal Steel, this court also noted, "[w]hile the Commission may not enter an affirmative determination unless it finds that a domestic industry is materially injured `by reason of' subject imports, the Commission is not required to follow a single methodology for making that determination."
Id. at 878 (internal citation omitted). The Commission's explanation was meaningful in this case.
In addition, this court has stated the "`Commission need not isolate the injury caused by other factors from injury caused by unfair imports,'" Bratsk, 444 F.3d at 1373 (quoting SAA at 851), nor demonstrate the subject imports are the "principal" cause of injury, Nippon Steel Corp. v. Int'l Trade Comm'n, 345 F.3d 1379, 1381 (Fed.Cir.2003) ("[T]he `dumping' need not be the sole or principal cause of injury. As long as its effects are not merely incidental, tangential or trivial, the foreign product sold at less than fair value meets the causation requirement."). Appellants' reliance on our case law does not support their proposition that a strict counterfactual analysis is required to demonstrate material injury "by reason of" subject imports. As the CIT stated, "[t]he Commission need not state for the record the precise contours of the hypothetical counterfactual `but for' state, so long as its ultimate conclusions, on causation `by reason of' subject imports from the evidence of record, are discernable and reasonable." Swiff-Train II, 999 F.Supp.2d at 1352.
Accordingly, the Commission's causation analysis was in accordance with law.
Next, Appellants argue the Commission erred in asserting that by statute the proper test for causation falls within its discretion. Appellants' Br. 17. In the
Id.
The court declines to entertain Appellants' unjustified hyperbole. The Commission did not improperly exercise its discretion in making its causation analysis; rather, it adhered to the statutory requirements as interpreted by the SAA, the legislative history, and this court's cases discussing the statutory causation standard. As to its discretion, the Commission stated:
Remand Views at 33 n. 142.
This statement does not amount to the Commission improperly deferring to its own discretion in place of fulfilling the statutory "by reason of" standard; rather,
Appellants further argue the CIT "erred in introducing the substantial factor test of causation as a means of bypassing the threshold requirement of `but-for' causation in fact." Appellants' Br. 16. Appellants say in Swiff-Train II, "on its own motion, the CIT introduced the `substantial factor' test of legal causation to assess whether the Commission had interpreted the `by reason of' language in accordance with law." Id. at 34; Reply Br. 9 ("Since the Commission refused to respond to the but for causation argument, except to state that the causation standard itself, and not simply the analysis the Commission adopts to apply the standard, is left to the discretion of the Commission, the CIT, in upholding the Commission's remand determinations, crafted from thin air the substantial factor causation standard sua sponte, and concluded that is what the Commission had applied."). Appellants also challenge the CIT's reasoning that "if the Commission undertakes a proper `substantial factor' analysis and finds subject imports the legal cause of material injury, then the Commission has, perforce, necessarily determined that the subject imports are the `but for' cause of injury." Appellants' Br. 34. They say this reasoning, "though accurate," led to an error of law because it allowed the Commission to "bypass the counterfactual analysis." Id. at 34-35 (emphasis added). To Appellants, a two-step analysis is required: "the Commission must first determine whether the subject imports are a `but-for' cause of injury and then assess whether they were the substantial factor in causing the harm. The fact that this two-part analysis did not occur was an error of law." Id. at 42.
Nowhere in Swiff-Train II did the CIT "introduce[] the substantial factor test of causation" as Appellants allege. Id. at 16. The CIT provided a detailed discussion of this court's cases to illustrate the interplay between but-for causation and the substantial-factor analysis to support its observation that "`[s]ubstantial factor' analysis subsumes [the] `but for' causation analysis, albeit with multiple acts and effects for consideration." Swiff-Train II, 999 F.Supp.2d at 1343. In support, the CIT cited Mittal Steel, where this court noted "Bratsk ... simply required the Commission to consider the `but for' causation analysis in fulfilling its statutory duty to determine whether the subject imports were a substantial factor in the injury to the domestic industry, as opposed to a merely `incidental, tangential, or trivial' factor." Mittal Steel, 542 F.3d at 879 (quoting Nippon Steel, 345 F.3d at 1381) (emphasis added). The CIT then observed "if the Commission undertakes a proper `substantial factor' analysis and finds subject imports the legal cause of material injury, then the Commission has, perforce, necessarily determined that the subject imports are the `but for' cause of injury." Swiff-Train II, 999 F.Supp.2d at 1343; cf. Burrage, 134 S.Ct. at 889 n. 4 (explaining that in Price Waterhouse, the Court "did not eliminate the but-for-cause requirement imposed by the `because of' provision of [the statute at issue], but allowed a showing that discrimination was a `motivating' or `substantial' factor to shift the
Thus, the CIT was not attempting to "bypass the counterfactual analysis," Appellants' Br. 34-35; rather, it was accurately explaining the relationship between our cases that discuss causation in terms of the "substantial factor" analysis and those that call for a "but-for" analysis. In doing so, the CIT noted Appellants "are correct: a finding of cause-in-fact must express, at a minimum (and howsoever expressed), the fundamental sufficiency of a `but for' analysis." Swiff-Train II, 999 F.Supp.2d at 1344 (emphasis added); see Burrage, 134 S.Ct. at 889 ("[T]he phrase, `by reason of,' requires at least a showing of `but for' causation.") (emphasis added). Therefore, the CIT concluded, "the Commission ha[d] properly framed the legal basis upon which to determine whether subject imports are the cause-in-fact of material injury, to wit, `notwithstanding any injury from other factors.' That is an obvious expression of a `but for' cause-in-fact inquiry." Swiff-Train II, 999 F.Supp.2d at 1344. (emphasis added). Appellants' unsupported suggestion that the CIT independently imposed a new test is therefore unavailing. Furthermore, Appellants cite no support for their proposition that a two-step analysis is required whereby the Commission must first determine whether the subject imports are a "but-for" cause of injury and then assess whether they are the substantial factor in causing the injury.
Accordingly, this court finds no error in the CIT's analysis.
Finally, U.S. Importers argue the Commission's decision was not based on substantial evidence because a counterfactual analysis was not performed. In contrast to the Commission's findings, Appellants offer their own summation of the record evidence: "The heart of the analysis is the observation that the record in this investigation offers a rare extended natural experiment from the beginning of 2009 through the end of the [period of investigation] that supports unambiguously a strong inference that U.S. demand for [multilayered wood flooring] is extremely highly — bordering on infinitely — elastic." Appellants' Br. 49-50. Therefore, Appellants conclude, "[a]s a result of the extremely high elasticity of U.S. demand for [multilayered wood flooring], increased sales of subject imports in the U.S. market have not resulted in lower [multilayered wood flooring] prices, and have therefore not harmed the U.S. [multilayered wood flooring] industry." Id. at 50; see also id. at 52 ("The only economically coherent explanation for why increased sales of [multilayered wooding flooring] in the U.S. market in the face of declining demand did not reduce U.S. [multi-layered wooding flooring] prices is that U.S. demand for [multilayered wooding flooring] is extremely highly elastic (i.e., geometrically, the demand curve is almost horizontal, locking down price even when supply increases)."). Thus, U.S. Importers believe their "analysis shows the U.S. industry's observed condition during the [period of investigation] to be the same as its condition but-for competition with the subject imports." Id.
As noted, when analyzing whether an industry is materially injured "by reason of" subject imports, the Commission considers the volume of subject imports, their price effects, and their impact on the domestic industry, 19 U.S.C. § 1677(7)(B)(i), (C)(i)-(iii), and must support its ultimate conclusion with substantial evidence. Here, the Commission examined each of these factors and explained in detail why substantial evidence supports both its findings
Specifically, the Commission made detailed findings based on the record evidence on the following factors: (1) "subject imports from China and the domestic like product competed in the U.S. market primarily based on price," Remand Views at 28 (emphasis added); (2) "traditional quarterly pricing data" indicated subject imports "undersold the domestic like product throughout the [period of investigation]," id. (emphasis added); (3) "low-priced subject imports gained sales and market share directly at the domestic industry's expense," id. at 29 (emphasis added); (4) "by underselling the domestic like product at significant margins while selling products that were highly substitutable for the domestic like product and competing in the same geographic markets and channels of distribution," subject imports "maintain[ed] a significant volume both in absolute terms and relative to consumption in the United States, increase[d] significantly relative to domestic production, and capture[d] significant market share from the domestic industry," id. at 30-31 (emphases added); (5) low-priced subject imports "depressed prices of the domestic like product in the U.S. market," id. at 31 (emphasis added); and (6) the low-priced, directly competitive subject imports had a materially injurious impact on the domestic industry, id. at 36. In addition, the Commission explained how the record evidence revealed that, regardless of whether "U.S. consumption was increasing or declining," through significant underselling, subject imports continued to gain market share, capturing significant market share from the domestic industry. Id. at 31.
As to Appellants' alternative view of the record and their arguments regarding the elasticity of market demand, the Commission acknowledged demand declined overall during the period of investigation. Id. at 42 ("[Q]uestionnaire respondents generally reported decreased demand for [multilayered wood flooring] during the [period of investigation]."). Nonetheless, based on the data on the record, the Commission explained subject imports maintained a significant volume that increased significantly relative to domestic production and consumption by underselling the domestic-like product at significant margins regardless of demand conditions. Id. at 43-45. Thus, the Commission concluded, the "domestic industry's loss of market share to unfairly traded subject imports from China... throughout the period of investigation was not a function of demand." Id. at 44.
Having considered the volume of subject imports, their effect on prices of the domestic-like product, and their impact on the domestic industry within the context of the business cycle and relevant conditions of competition, the Commission found the domestic multilayered wood flooring industry was materially injured by reason of subject imports from China. Id. at 36. This determination was supported by substantial evidence. See Cleo, 501 F.3d at 1296 (The substantial evidence test does not require an "absence of evidence detracting from the agency's conclusion, nor is there an absence of substantial evidence simply because the reviewing court would have reached a different conclusion based on the same record.").
Accordingly, the decision of the United States Court of International Trade is
