ITC Says It Was Right to Not Exclude Domestic Producer Owned by Exporter From Injury Analysis

It said its decision to refuse to exclude Fujifilm Manufacturing USA from the domestic industry as a “related” party was reasonable and comported with longstanding practice. The exclusion “would have masked declines in the domestic industry’s performance,” it said.

Fujifilm and Eastman Kodak Company are the two primary U.S. manufacturers of aluminum printing plate for photographic development. Fujifilm also has manufacturing facilities abroad. It closed down its plant in Greenwood, South Carolina, in March 2022, partway through the review period, switching instead to relying on imports.

In a July motion for judgment, Fujifilm argued that the ITC should have excluded its domestic production based on U.S.C. 1677(4)(B), which lets the commission take such a step “in appropriate circumstances” when a domestic producer is “related” to an exporter (see 2507240003).

But the statute doesn’t define “appropriate circumstances,” ITC said. The Uruguay Round Act’s Statement of Administrative Action, however, explains that the provision is intended to keep out the potentially distortive data of domestic producers that are “being shielded from the effects of the subject imports,” it said.

Under the ITC’s “shield” test, the commission considers whether imports competed with domestic production during the investigation period, it said.

But Fujifilm’s production declined during the period -- after the closure of its plant -- which wasn’t consistent with a producer being shielded from import competition, it claimed. At the same time, it noted, imports increased.

In other words, the ITC said, Fujifilm Manufacturing USA didn’t benefit from its affiliation with the broader company. “To the contrary, its performance declined as subject imports identical to domestically produced [aluminum lithographic printing plates] increased.”

It disagreed that it was confusing cause and effect. It claimed that Fujifilm was mixing up the analyses for causation and related parties.

“Plaintiffs acknowledge that Fujifilm Manufacturing USA was not shielded from subject import competition but rather had its domestic production systematically replaced by dumped and subsidized imports,” it said.

It also pushed back on Fujifilm’s appeal to Loper Bright. It said U.S.C. 1677(4)(B)’s use of the word “appropriate,” as well as its lack of particular criteria, indicates that the statute intended to grant the ITC discretion in its decision-making in this circumstance.

And it defended its volume and price findings.

The ITC reasonably determined that a near-tripling of subject imports over the review period was “significant,” it said. It denied that it had to consider “volume effects,” as Fujifilm argued, saying that that didn’t appear in the statute. It also didn’t have to consider the cause of the increase in imports, it said; that only occurs in its impact analysis.

It also reasonably found that the imports impacted pricing. It said it properly gave “little weight to the overall pricing data” because a proper comparison between Fujifilm’s imports and Kodak’s domestic sales wasn’t possible, partly due to differing pricing structures and partly because it “found that Fujifilm’s pricing data … includ[ed] certain costs that should have been netted out.”

Instead, the ITC properly looked at the two producers’ sales to their 10 largest customers, it said.

And the commission did consider evidence that price wasn’t the single most important purchase consideration for customers, it said. However, it did properly find that price was an important factor, “among other important factors,” based on the fact that most purchasers it reviewed did rank price among their top three factors and called it “very important.”