Error: Bad annotation destination
 United States Court of Appeals for the Federal Circuit

                                   05-1404, -1417


            NIPPON STEEL CORPORATION, NKK CORPORATION,
         KAWASAKI STEEL CORPORATION, and TOYO KOHAN CO., LTD.,

                                                     Plaintiffs-Appellees,

                                          v.

                                  UNITED STATES,

                                                     Defendant-Appellant,

                                         and

                           MITTAL STEEL USA ISG INC.,

                                                     Defendant-Appellant.



        James P. Durling, Willkie Farr & Gallagher, LLP, of Washington, DC, argued for
plaintiffs-appellees. With him on the brief were Daniel L. Porter and Robert E.
DeFrancesco.

      Neal J. Reynolds, Assistant General Counsel for Litigation, Office of the General
Counsel, United States International Trade Commission, of Washington, DC, argued for
defendant-appellant United States. With him on the brief was James M. Lyons, General
Counsel.

      Terence P. Stewart, Stewart and Stewart, of Washington, DC, argued for
defendant-appellant Mittal Steel USA ISG Inc. With him on the brief were Eric P.
Salonen, Patrick J. McDonough, and Sarah V. Stewart.

      John J. Mangan, Skadden, Arps, Slate, Meagher & Flom LLP, of Washington,
DC, for amicus curiae United States Steel Corporation. With him on the brief were
Robert E. Lighthizer, James C. Hecht, and Stephen P. Vaughn.

Appealed from: United States Court of International Trade

Chief Judge Jane A. Restani
 United States Court of Appeals for the Federal Circuit

                                    05-1404, -1417

            NIPPON STEEL CORPORATION, NKK CORPORATION,
         KAWASAKI STEEL CORPORATION, and TOYO KOHAN CO., LTD.,

                                                Plaintiffs-Appellees,

                                           v.

                                  UNITED STATES,

                                                Defendant-Appellant,

                                          and

                            MITTAL STEEL USA ISG INC.,

                                                Defendant-Appellant.


                            _________________________

                              DECIDED: August 10, 2006
                            _________________________


Before MICHEL, Chief Judge, LINN and PROST, Circuit Judges.

MICHEL, Chief Judge.

      The United States and Mittal Steel USA ISG Inc. (“Mittal”) appeal the decision of

the United States Court of International Trade (“trade court”) instructing the United

States International Trade Commission (“Commission”) to issue a determination that the

domestic industry was not materially injured by less-than-fair-value (“LTFV”) imports of

tin- and chromium-coated steel sheets (“TCCSS”) from Japan. Nippon Steel Corp. v.

United States, 350 F. Supp. 2d 1186, 1189, 1222 (Ct. Int’l Trade 2004) (“Nippon IV”).

The Commission accordingly entered determinations of no material injury and no threat
of material injury.   Tin- and Chromium-Coated Steel Sheet from Japan (Views on

Remand), USITC Pub. 3751, Inv. No. 731-TA-860 (Final) (Dec. 2004) (Third Remand

Determination) (“TRD”).    The Court of International Trade sustained the negative

determinations. Nippon Steel Corp. v. United States, No. 00-09-00479 (Ct. Int’l Trade

Mar. 23, 2005) (“Nippon V”).

      Appellants argue that the Court of International Trade erred in Nippon IV by

reweighing the facts and substituting its own credibility determinations, in contravention

of law and this court’s remand instructions in Nippon Steel Corp. v. Int’l Trade Comm’n,

345 F.3d 1379, 1380 (Fed. Cir. 2003) (“Nippon III”). Appellants further argue that the

Court of International Trade erred in holding in Nippon IV that the Commission’s

affirmative material injury determination in its second remand determination, Tin- and

Chromium-Coated Steel Sheet From Japan, Inv. No. 731-TA-860 (Feb. 2004) (A.R.2-

263R) (Second Remand Determination) (“SRD”), was supported by less than

substantial evidence.

      We agree. Accordingly, we reverse the Court of International Trade’s decisions

in Nippon IV and Nippon V, and instruct the trade court to vacate the Commission’s

negative material injury and negative threat of material injury determinations in TRD and

reinstate the Commission’s affirmative material injury determination in SRD.

                                            I

      This antidumping case has a procedural history spanning six years, which now

includes four determinations by the Commission, four opinions from the Court of

International Trade, and one prior opinion from this court. Given the voluminous record

in this case, we presume familiarity with the prior proceedings, issues and factual




05-1404, -1417                              2
background. Accordingly, we provide only a cursory overview of the procedural history,

and discuss only those factual and evidentiary issues that remain in dispute.

       In 2000, the Commission made a final determination that the domestic industry

was materially injured by TCCSS dumping from Japan, which required consideration of

import volume, price effects, impact on domestic producers, and causation. Tin- and

Chromium-Coated Steel Sheet From Japan, 65 Fed. Reg. 50,005, USITC Pub. 3300,

Inv. No. 731-TA-860 (final determ.) (Aug. 2000) (A.R.2-148) (“Final Determination”).

See 19 U.S.C. § 1677(7)(B)(i); Gerald Metals, Inc. v. United States, 27 F. Supp. 2d

1351, 1356 & n.8 (Ct. Int’l Trade 1998). Nippon Steel Corporation, NKK Corporation,

Kawasaki Steel Corporation, and Toyo Kohan Co., Ltd. (collectively, “Nippon”) sought

review in the Court of International Trade, which sustained the Commission’s finding of

a small but significant volume, but remanded for a reevaluation of price effects and

causation.1 Nippon Steel Corp. v. United States, 182 F. Supp. 2d 1330, 1340, 1356 (Ct.

Int’l Trade 2001) (“Nippon I”).

       On remand, the Commission again made an affirmative material injury

determination. Tin- and Chromium-Coated Steel Sheet From Japan, Inv. No. 731-TA-

860 (final determ.) (March 2002) (A.R.2-261R) (First Remand Determination) (“FRD”).

Nippon again appealed, and the Court of International Trade found lingering flaws in the

Commission’s analysis of price effects and causation. Nippon Steel Corp. v. United

States, 223 F. Supp. 2d 1349 (Ct. Int’l Trade 2002) (“Nippon II”). However, rather than

remand for further proceedings, the court vacated the affirmative material injury

determination and directed the Commission to enter a negative material injury

       1
            Nippon did not appeal the Commission’s finding of significant impact on
domestic producers. See id. at 1335.


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determination.    Id. at 1372.   The court declined to remand because, it stated, the

Commission had “demonstrated an unwillingness or inability to address the substantial

claims made by the respondents or the concerns expressed by the court in Nippon I.”

Id. at 1371-72.

       The Commission then appealed to this court. We vacated the decision of the

Court of International Trade in Nippon II and ordered a remand to the Commission for

additional data gathering and analysis. Nippon III, 345 F.3d at 1380. We explained that

“to the extent the Court of International Trade engaged in refinding the facts (e.g., by

determining witness credibility), or interposing its own determinations on causation and

material injury . . .[it] exceeded its authority”, and held that the trade court abused its

discretion by declining to remand the case to the Commission. Id. at 1381.

       On the second remand, the Commission yet again made an affirmative material

injury determination.   SRD.     Nippon sought review once more, and the Court of

International Trade remanded for a third time, again instructing the Commission to enter

a negative material injury determination. Nippon IV, 350 F. Supp. 2d. at 1189. In

addition, the trade court directed the Commission to determine whether the domestic

industry was threatened with material injury. Id. at 1222.

       The Commission entered a negative material injury determination on the third

remand, stating: “this outcome is dictated by the Court’s findings in Nippon IV; it is not,

however, the determination we would have made in the absence of those findings.”

TRD at 1. Similarly, the Commission found that certain statutory factors weighed in

favor of an affirmative threat determination, but explained that the trade court’s

statement in Nippon IV that “the record fully supports a negative determination and will




05-1404, -1417                              4
not support an affirmative one”, 350 F. Supp. 2d at 1222 (emphasis in original),

“constrained significantly” its ability to perform a threat analysis and, in effect, required it

to issue a ruling contrary to its factual findings. TRD at 5-6. As such, the Commission

issued a negative threat of material injury determination.            Id.   The Commission

expressed concern that the Court of International Trade had again exceeded the scope

of its authority:

                Although we comply with the Court’s order, we are concerned the
        Court has again exceeded the scope of its review authority in this case . . .
        [W]e believe that the trade court has committed the same mistakes
        identified by the Federal Circuit in Nippon III. For example, the Court has
        again re-found facts by substituting its view of the record for that of the
        Commission on such important issues as the significance of subject
        underselling or the existence of correlations between underselling and
        increased purchases of subject imports during the [period of investigation].
        The Court has also rejected the Commission’s witness credibility
        determinations, substituting in its place the Court’s own assessment of the
        accuracy of testimony offered by purchasers during the investigation.
                Finally, by directing the Commission to issue a determination that
        subject imports did not cause material injury to the industry, the Court has
        again substituted its own findings on the ultimate issues of causation and
        injury for those of the Commission, even though the Federal Circuit
        specifically directed the Court in Nippon III not to do so.

Id. at 5.

        Defendant-intervenor International Steel Group Inc. (“ISG”)2 sought review of the

third remand determination in the Court of International Trade, arguing that the record

supported an affirmative threat determination, and Nippon challenged certain subsidiary

findings of the Commission’s negative threat determination. Nippon V, slip op. at 3.

The court sustained the negative material injury determination. Id., slip op. at 5. The

court agreed with plaintiffs that two of the three appealed subsidiary rulings regarding

        2
             During the course of these proceedings, ISG merged with Weirton, and
was substituted as defendant-intervenor on November 24, 2004. Nippon V, slip op. at
4. ISG-Weirton merged with Mittal Steel USA effective April 2005.


05-1404, -1417                                 5
threat of material injury—relating to production capacity, and volume and market

penetration, see 19 U.S.C. § 1677(7)(F)(ii)—were flawed, but sustained as “reasonable”

the Commission’s ultimate negative determination of threat of material injury. Id., slip

op. at 9, 14.

       The United States and Mittal appeal. We have jurisdiction pursuant to 28 U.S.C.

§ 1295(a)(5).

                                            II

       Congress created a highly specialized system for resolving antidumping

allegations, which recognizes and exploits each participant’s area of expertise.        An

antidumping inquiry is divided into two sub-inquiries: a determination of whether the

subject imports were, or were likely to be, sold at LTFV, and a material injury

determination. Congress placed responsibility for the LTFV determination with industry

experts at the Department of Commerce, 19 U.S.C. § 1673d(a)(1), and placed

responsibility for the material injury determination with trade experts at the Commission.

Id. § 1673d(b)(1).

       Commissioners are appointed by the President, and confirmed by the Senate,

because of their expertise in recognizing, and distinguishing between, fair and unfair

trade practices. They presumably are selected to be Commissioners based on their

expertise in, inter alia, foreign relations, trade negotiations, and economics. Because of

this expertise, Commissioners are the factfinders in the material injury determination: “It

is the Commission’s task to evaluate the evidence it collects during its investigation.

Certain decisions, such as the weight to be assigned a particular piece of evidence, lie




05-1404, -1417                              6
at the core of that evaluative process.” U.S. Steel Group v. United States, 96 F.3d

1352, 1357 (Fed. Cir. 1996).

       In contrast, Article III judges have expertise primarily in law.       Accordingly,

Congress assigned the Court of International Trade, and, through our appellate

authority, this court, the responsibility to review the legal sufficiency of a Commission

determination. When the Commission has made a final determination of material injury

or threat of material injury to a domestic industry, 19 U.S.C. § 1516a(b)(1)(B)(i) provides

that the Court of International Trade “shall hold unlawful any determination, finding, or

conclusion found . . . to be unsupported by substantial evidence on the record, or

otherwise not in accordance with law.” To be sure, judges of the Court of International

Trade are experts in such cases, which form most of their docket, while this court’s

judges are characterized as generalists, as trade cases comprise only about six percent

of the Federal Circuit docket.

       Congress did not specify a standard of review for this court in reviewing

judgments of the Court of International Trade. In Atlantic Sugar, Ltd. v. United States,

744 F.2d 1556, 1559 n.10 (Fed. Cir. 1984), however, we adopted the “substantial

evidence” judicial review standard prescribed at § 1516a(b)(1)(B)(i) for the trade court

as our appellate standard of review.3      Because the substantial evidence standard

requires review of the entire administrative record, we consider both the trade court’s



       3
              Appellees ask this panel to overrule the Atlantic Sugar standard of
appellate review in favor of the more deferential “misapprehended or grossly
misapplied” standard that the Supreme Court has adopted for itself in its discretionary
review of agency actions via certiorari petitions. See Universal Camera v. NLRB, 340
U.S. 474, 491 (1951). Our panel, of course, does not have authority to entertain this
argument, as only the court en banc may overrule precedent. George E. Warren Corp.
v. United States, 341 F.3d 1348, 1351-52 (Fed. Cir. 2003).


05-1404, -1417                              7
prior decisions and the Commission determinations, see Am. Silicon Techs. v. United

States, 334 F.3d 1033, 1037 (Fed. Cir. 2003), including “the evidence presented to and

the analysis by the Commission”, Matsushita Elec. Indus. Co. v. United States, 750 F.2d

927, 932 (Fed. Cir. 1984). In undertaking this review, we give great weight to “the

informed opinion of the Court of International Trade.”       Suramerica de Aleaciones

Laminadas, C.A. v. United States, 44 F.3d 978, 983 (Fed. Cir. 1994). Indeed, it is

nearly always the starting point of our analysis.

                                             III

       In Nippon III, we expressly declined to decide whether the evidence supporting

the Commission’s affirmative material injury determination was substantial, stating that

“[i]f and when the case reaches us again there will be time enough to do so.” 345 F.3d

at 1380. The case has reached us again, and we must now examine the substantiality

of the evidence.

                                             A

       “Substantial evidence” is difficult to define precisely.   However, the Supreme

Court, Congress, and prior panels of this court have provided some guidance. In NLRB

v. Columbian Enameling & Stamping Co., 306 U.S. 292, 300 (1939), the Court

explained that “[s]ubstantial evidence is more than a scintilla, and must do more than

create a suspicion of the existence of the fact to be established.” A reviewing court

must consider the record as a whole, including that which “fairly detracts from its

weight”, to determine whether there exists “such relevant evidence as a reasonable

mind might accept as adequate to support a conclusion.” Universal Camera, 340 U.S.

at 477-78 (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). As Judge




05-1404, -1417                               8
Nies explained in her additional views in SSIH Equipment SA v. United States ITC, 718

F.3d 365, 381 (Fed. Cir. 1983), in the hierarchy of the four most common standards of

review, substantial evidence is the second most deferential, and can be translated

roughly to mean “is [the determination] unreasonable?”

       In the legislative history of the APA, which adopted the “substantial evidence”

standard of judicial review for certain agency decisions, see 5 U.S.C. § 706(2)(E), the

Senate Judiciary Committee report recognized the difficulty of precise definition:

       As a matter of language, substantial evidence would seem to be an
       adequate expression of law. The difficulty comes about in the practice of
       agencies to rely upon (and of courts to tacitly approve) something less – to
       rely upon suspicion, surmise, implications, or plainly incredible evidence.
       It will be the duty of the courts to determine in the final analysis and in the
       exercise of their independent judgment, whether on the whole record the
       evidence in a given instance is sufficiently substantial to support a finding,
       conclusion, or other agency action as a matter of law.

S. Rep. No. 752, 79th Cong., 1st Sess. 28, 30-31, quoted in Universal Camera, 340

U.S. at 484 n.17. Accordingly, the Court in Universal Camera instructed that, under the

substantial evidence standard, “a reviewing court is not barred from setting aside a

Board decision when it cannot conscientiously find that the evidence supporting that

decision is substantial, when viewed in the light that the record in its entirety furnishes,

including the body of evidence opposed to the Board’s view.” 340 U.S. at 467-68.

       A party challenging the Commission’s determination under the substantial

evidence standard “has chosen a course with a high barrier to reversal.” Mitsubishi

Heavy Indus., Ltd. v. United States, 275 F.3d 1056, 1060 (Fed. Cir. 2001). We have

explained that “even if it is possible to draw two inconsistent conclusions from evidence

in the record, such a possibility does not prevent [the Commission’s] determination from

being supported by substantial evidence.” Am. Silicon Techs. v. United States, 261



05-1404, -1417                               9
F.3d 1371, 1376 (Fed. Cir. 2001).          Accordingly, the question for the Court of

International Trade was, and for this court is, “not whether we agree with the

Commission’s decision, nor whether we would have reached the same result as the

Commission had the matter come before us for decision in the first instance.” U.S.

Steel, 96 F.3d at 1357. Rather, “we must affirm a Commission determination if it is

reasonable and supported by the record as a whole, even if some evidence detracts

from the Commission’s conclusion.” Altx, Inc. v. United States, 370 F.3d 1108, 1121

(Fed. Cir. 2004) (internal quotation marks omitted).      In short, we do not make the

determination; we merely vet the determination.

                                             B

       In a material injury inquiry, the Commission is required by statute to evaluate the

volume, price effects, and impact of the subject imports. 19 U.S.C. § 1677(7). When

the Commission makes an affirmative material injury determination, it must decide

whether the material injury to the domestic industry is “by reason of” the subject imports.

19 U.S.C. § 1673d(b)(1).

       The Commission engaged in substantial research and analysis prior to issuing its

initial affirmative material injury determination.   It created, distributed, and analyzed

responses to detailed questionnaires sent to all seven domestic TCCSS producers, as

well as the five largest domestic purchasers of TCCSS.              From producers, the

Commission obtained and analyzed information on production, geographic scope of

sales, pricing and discounting practices, capacity utilization, shipments, inventories, and

employment. From purchasers, the Commission obtained and analyzed information on

final bids of domestic and Japanese suppliers, negotiation tactics, and purchasing




05-1404, -1417                              10
volume, and attempted to verify producers’ lost sale allegations. Two Commission staff

members visited complainant Weirton Steel’s premises and interviewed several

employees regarding the TCCSS manufacturing process, negotiations, pricing, and

contracts. In addition, Commissioners heard a full day of testimony, including that of

officers of four domestic purchasers, the CEO of Weirton Steel, and seven members of

Congress, including Senator John D. Rockefeller IV.

      The Court of International Trade likewise engaged in careful, thoughtful review of

each of the Commission’s findings.       In Nippon I, the Court of International Trade

sustained the Commission’s finding of a small but significant volume. 182 F. Supp. 2d

at 1340. The Commission also found significant impact, which Nippon did not appeal.

See id. at 1335. Thus, as of Nippon IV, the Court of International Trade had already

approved Commission findings on two of the three factors to be considered in a material

injury determination.     The evidence rejected by the Court of International Trade in

Nippon IV related to the remaining factor, price effects, and to causation. We therefore

state the issue before us as whether the Commission’s findings that Japanese TCCSS

dumping could be linked to price effects in, and causation of injury to, the domestic

market so distorts or detracts from the evidence in favor of injury as to render the

evidence supporting the Commission’s ultimate affirmative material injury determination

insubstantial on the record.

                                            1

      Section 1677(7)(C)(ii) provides that in evaluating price effects, the Commission

shall consider whether:




05-1404, -1417                              11
             (I) there has been significant price underselling by the imported
      merchandise as compared with the price of domestic like products of the
      United States, and
              (II) the effect of imports of such merchandise otherwise depresses
      prices to a significant degree or prevents price increases, which otherwise
      would have occurred, to a significant degree.

The trade court clearly was warranted in concluding that one finding of the Commission

was unsupported by substantial evidence. However, we agree with the appellants that,

with respect to other Commission findings, the record contained “such relevant

evidence as a reasonable mind might accept as adequate to support a conclusion.”

Universal Camera, 340 U.S. at 477-78 (quoting Consol. Edison, 305 U.S. at 229).

      The Court of International Trade rejected the Commission’s price effects

evidence because, it stated, Japanese underselling and domestic price depression or

suppression was “insignificant over the period of investigation” and “certain conditions of

competition also minimized any effect subject imports could have had on domestic

prices.” Nippon IV, 350 F. Supp. 2d at 1221. In particular, the trade court cited a low to

moderate ability of the imported TCCSS to impact domestic sales and prices;

compartmentalized and segmented price negotiations with domestic and foreign

producers, largely due to superior domestic lead times; the fact that domestic producers

supplied the majority of product; and Weirton’s inability to produce documentary

evidence of Japanese price competition. Id.

      On the one hand, the trade court correctly rejected evidence of price effects that

contained a mathematical miscalculation. In an earlier determination, the Commission

had provided disaggregated data on Purchaser A’s facilities and product types, FRD at

10; in response to remand instructions, Nippon II, 223 F. Supp. 2d at 1355, the

Commission aggregated Purchaser A’s data. SRD at 24. Post-aggregation, however,



05-1404, -1417                              12
the calculations were inconsistent. The number of underselling bids decreased, while

the volumes associated with underselling bids—and the total underselling bid volume—

increased. Nippon IV, 350 F. Supp. 2d at 1191. The Court of International Trade

correctly pointed out that aggregation should not affect the total bid volume and, after

noting that the Commission had provided no explanation for the change in the total

volume, correctly disregarded the evidence.        Id.   However, because the Court of

International Trade approved the other two Commission findings relating to compilation

of price comparison data, id. at 1192, even setting aside the flawed calculation, the

trade court largely accepted the Commission’s methodology.

       On the other hand, we cannot support the Court of International Trade’s rejection

of the Commission’s analysis of certain domestic producer accounting data, and thus its

conclusion regarding domestic price suppression.           The trade court rejected the

Commission’s finding that the subject imports caused the suppression of domestic

prices, which was based on the Commission’s underlying finding that the domestic

industry was suffering from a cost-price squeeze.4        The Commission evaluated the

producers’ financial data, noting that the domestic industry’s overall cost of goods sold

(“COGS”) had increased in relation to net sales, from 96.4 percent of sales in 1997 to

97.8 percent in 1998 and 101.3 percent in 1999.           SRD at 26.     The Commission

attributed this change to a corresponding decline in unit prices “at a rate that outstripped

the industry’s unit costs” and noted that the industry’s profitability levels also declined

consistently during the relevant period, with operating losses increasing from 0.9

       4
               When cost of goods sold (“COGS”) exceeds price, the producer is unable
to sell the product for more than what it costs to produce the product; if the producer is
unable to raise prices, the industry finds itself in what is referred to as a cost-price
squeeze. See Nippon IV, 350 F. Supp. 2d at 1198.


05-1404, -1417                              13
percent in 1997 to 3.0 percent in 1998 to 6.5 percent in 1999. Id. The Commission

acknowledged that the operating losses decreased to 1.9 percent in the interim year

2000, but attributed this change to the filing of the antidumping petition in October 1999.

Id. at 26-27. Likewise, the Commission considered and rejected Nippon’s assertion that

“members of the domestic industry were able to increase their prices during the period

in the face of subject import underselling for certain purchasers”, stating that the record

data indicates that “any such price increases were not sufficient to offset any

corresponding changes in the industry’s [COGS].” Id. at 27.

       The Court of International Trade agreed that “the domestic industry generally

may have been experiencing a cost-price squeeze”, but rejected the Commission’s

conclusion based on Nippon’s assertion that the two domestic producers competing

most directly with Japanese TCCSS importers reported positive operating margins

during the period of investigation. Nippon IV, 350 F. Supp. 2d at 1198 & n.27. Implicit

in Nippon’s assertion, and the Commission’s rejection thereof, is the fact that other

domestic producers showed negative operating margins. Thus, we are faced with a

situation where some domestic producers, and the industry as a whole, were in a cost-

price squeeze, while two major producers were not. Substantial evidence exists on

both sides of the issue. The Commission opted for one inference, and the Court of

International Trade for another. In such a situation, however, the statutory substantial

evidence standard compels deference to the Commission.

       Likewise, we cannot uphold two of the trade court’s rejections of Commission

findings regarding conditions of competition in the domestic industry. First, the trade

court rejected the Commission’s finding that U.S. and Japanese negotiations take place




05-1404, -1417                              14
on equal footing.     In Nippon II, the Court of International Trade instructed the

Commission to “evaluate purchaser perceptions with respect to the domestic industry’s

lead-time advantage as a potential explanation for keeping negotiations on separate

tracks with volume allocated among domestic versus foreign suppliers.” Nippon II, 223

F. Supp. 2d at 1352. In its SRD, the Commission found that domestic producers’ lead

time advantage was offset by purchasers engaging in negotiations far in advance of

production needs and by Japanese producers’ willingness to carry the cost of

consignment inventories at storage facilities in the United States. SRD at 75-77. In

support, the Commission cited purchaser testimony indicating that purchasers mitigated

risks by giving a “finite number of specifications” to an offshore source, and two

purchasers’ internal memoranda discussing consignment, one of which stated that the

purchaser was “working through to insure consignment inventories would be in place in

an effort to mitigate problems [with on-time delivery from foreign sources].” Id. at 76-77.

The Commission noted that the internal memoranda were consistent with a third

purchaser’s testimony regarding consignment. Id. at 77.

       The Court of International Trade stated that “[t]he fact that purchasers negotiate

for advance specifications and for consignment inventories with Japanese suppliers but

not with domestic suppliers, undercuts the Commission’s finding that U.S. and

Japanese negotiations take place on equal footing.” Nippon IV, 350 F. Supp. 2d at

1211-12. We do not agree that the Commission’s finding was unreasonable in light of

the evidence as a whole. In any purchasing situation, competing producers are not

identical.   As the Commission explained in its SRD, “each supplier, regardless of

whether it is foreign or domestic, negotiates to maximize premiums based on its unique




05-1404, -1417                              15
capabilities.”   SRD at 77.    Purchasers attempt to negotiate concessions that will

minimize each producer’s drawbacks, and undertake a cost-benefit analysis in making

the optimal purchasing decisions. This individualized assessment of producers may not

mean that foreign and domestic producers do not compete for the same piece of

business, and may indicate merely that purchasers cannot evaluate foreign and

domestic producers in an identical way. The Commission’s finding of equal footing was

thus plausible given the evidence in the record as a whole.

       Second, the trade court substituted its own inference regarding the significance

of Weirton’s inability to provide contemporaneous documentary evidence of Japanese

price competition. The Weirton representative submitted documentation from the period

of investigation that only contained pricing data from other domestic firms. See Nippon

IV, 350 F. Supp. 2d at 1212. He testified that he only discovered “after the fact” that

Weirton was competing with Japanese prices, and thus was not informed by customers

that a particular quoted price was from a Japanese producer. Id. at 1212 n.62.          In its

FRD, the Commission accorded the absence of contemporaneous documentation little

weight, FRD at 22-23, and reevaluated this finding after the Court of International Trade

criticized its decision in Nippon II. Nippon II, 223 F. Supp. 2d at 1352.

       On    remand,   the    Commission     again   concluded    that      the   absence    of

contemporaneous documentation deserved little weight.              SRD at 78-80.            The

Commission stated that “the record reflects that purchasers do not specify the identity of

suppliers with which they are negotiating, making it more difficult for a supplier to

pinpoint its competition.” Id. at 78. In support, it cited testimony from Weirton’s CEO,

who stated that the company never knows when specific Japanese bids are being




05-1404, -1417                              16
introduced into contract negotiations, and a sworn affidavit from a Weirton sales

manager indicating that several purchasers informed him in negotiations of their intent

to purchase low-priced product from Japan. Id. at 78-79. The Commission noted that

the sales manager’s testimony was corroborated by the purchasers’ own documents,

and was supported by another domestic producer’s questionnaire response. SRD at

79-80.     As such, the Commission concluded that “the fact that this information is

contained in an affidavit of a [Weirton official] rather than in contemporaneous

documents submitted by [Weirton] is not significant given that a purchaser’s own

contemporaneous documents effectively corroborate the affidavit.” Id.

         The trade court rejected the Commission’s inference-drawing, stating that “the

fact that Weirton—a party to this action and principal supporter of the petition—is unable

to provide evidence supporting its allegations, is important evidence of lack of injury.”

Nippon IV, 350 F. Supp. 2d at 1212-13. The trade court expressed skepticism over

Weirton’s failure to document offshore competition, and failure to document Japanese

competition after the fact. Id. Again, we do not agree that the Commission’s finding

was unreasonable in light of the evidence as a whole. The Weirton representative’s

testimony was consistent and was not impeached, and was corroborated by testimony

of its sales manager and by documents from the purchaser involved in the negotiations.

The assessment of the proper weight to accord to testimony is within the role of the

Commission, not this court and not the Court of International Trade. Perhaps Senior

Judge Nichols best explained this principle in his additional views in Matsushita. The

appellants in Matsushita challenged a Commission determination of threat of material




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injury which, like the appellants’ challenge here, rested largely on the weight given to

testimony of an allegedly injured domestic producer. Senior Judge Nichols wrote:

      There may not be a word of truth in any of his testimony, but we are
      required to supposed otherwise, since it was given in person and under
      oath and subject to cross-examination, since his knowledge of the subject
      was obviously unsurpassed, and since no opposing testimony was
      introduced, as it easily could have been if Mr. Moss’ testimony were false
      or if his opinions were erroneous. The Moss testimony is just the kind a
      court must look for when it is required to review a determination under the
      “substantial evidence” standard. One who seeks to overturn a quasi-
      legislative determination, reviewed under that standard, without such
      testimony in support of his own position is undertaking a heavy load
      indeed.

Matsushita, 750 F.2d at 937.      Here, the record as a whole contained substantial

evidence    supporting    Weirton’s     assertions,   which   the   mere   absence    of

contemporaneous documentation, without more, cannot nullify. Accordingly, the trade

court erred in rejecting the Commission’s conclusion regarding the conditions of

competition in the domestic industry.

                                             2

      Section 1673d(b)(1) provides that, once the Commission has made an affirmative

material injury determination, it must determine whether the injury arises “by reason of

imports, or sales (or the likelihood of sales) for importation . . . . If the Commission

determines that imports of the subject merchandise are negligible, the investigation

shall be terminated.”    This causation requirement is met so long as the effects of

dumping are not merely incidental, tangential, or trivial. Gerald Metals, Inc. v. United

States, 132 F.3d 716, 721-22 (Fed. Cir. 1997).

      In rejecting the Commission’s finding on causation, we must conclude that the

Court of International Trade again improperly substituted its own credibility




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determinations for those of the Commission. The Commission’s finding of causation

was based entirely on its interpretation of purchaser questionnaires, testimony, and

purchasing history. For example, Purchaser F stated in its questionnaire that it dropped

two domestic suppliers because of price, and two for poor performance. See Nippon IV,

350 F. Supp. 2d at 1215. The Purchaser F representative testified that, after “a series

of delivery and quality disappointments with certain U.S. mills”, specifically Weirton, it

made “a strategic decision to diversify its sourcing including additional sourcing [of

TCCSS] from abroad” during the period of investigation. Id.

       In its FRD, the Commission noted that Purchaser F’s testimony that it dropped

Weirton due to delivery and quality disappointments could not be reconciled with

Purchaser F’s increased TCCSS purchases from Weirton in 1999, Purchaser F’s

questionnaire response indicating that two domestic suppliers had been dropped

because of price, or internal documents indicating that its sourcing decisions were

driven primarily by price. FRD at 33. The Commission concluded that the evidence that

import purchases were made because of price was more credible, and found that injury

to the domestic industry was not caused solely by problems with domestic producers’

quality and delivery. Id.

       In Nippon II, the trade court rejected the Commission’s explanation by stating

that Purchaser F’s increased purchases from Weirton in 1999 was not necessarily

inconsistent with its citation of delivery and quality issues, because Purchaser F was

also experiencing delivery and quality issues with another domestic supplier in 1999.

Nippon II, 223 F. Supp. 2d at 1367. In its SRD, the Commission considered the trade

court’s comments, but reaffirmed its conclusion that Purchaser F’s testimony was




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inconsistent with, and less credible than, other data of record pointing to price concerns.

SRD at 95.       The Commission emphasized that the purchaser questionnaire was

executed and signed by the testifying representative, and thus the “unambiguous”

testimony and questionnaire responses, which offered opposing reasons for dropping

domestic suppliers, were unquestionably contradictory. Id. at 97-98. In addition, the

Commission again pointed out that Purchaser F’s purchasing patterns during the

relevant period were inconsistent with its testimony, and thus supported the

Commission’s decision to discount the testimony. Id. at 98.

       The Court of International Trade again rejected the Commission’s findings. It

restated its position that Purchaser F’s testimony and questionnaire responses were

consistent, this time emphasizing that the questionnaire also listed quality as one of the

reasons leading to its switch to foreign producers. Nippon IV, 350 F. Supp. 2d at 1215.

The court expressly declined to readdress the Commission’s assertion that Purchaser

F’s documented purchasing patterns were inconsistent with its testimony, id. at 1215

n.66, and held that, when considering all of the evidence, it was clear that “the harm

suffered by the domestic industry was not by reason of subject imports.” Id. at 1222.

       We need not decide whether Purchaser F’s testimony can be reconciled with its

questionnaire response and documented purchasing history, because the record

contains substantial evidence pointing to both price and quality as reasons for

Purchaser F’s switch to a foreign producer. It may well be that the trade court’s analysis

of the evidence relating to Purchaser F was correct, but the basis of that decision rested

upon a determination that Purchaser F’s testimony was entitled to more weight than the

Commission gave it.       Under the substantial evidence standard, when adequate




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evidence exists on both sides of an issue, assigning evidentiary weight falls exclusively

within the authority of the Commission.

                                           C

      The Court of International Trade engaged in an extremely thorough, careful

examination of the record. Indeed, we can accept that the Court of International Trade

may well have conducted a better analysis than did the Commission, and that we would

have reached the same conclusion as the trade court if deciding the case in the first

instance.   However, even with the most generous interpretation of the Court of

International Trade’s conclusions, we cannot agree that the evidence before the

Commission with respect to price effects and causation fell short of “such relevant

evidence as a reasonable mind might accept as adequate to support a conclusion.”

Universal Camera, 340 U.S. at 477-78 (quoting Consol. Edison, 305 U.S. at 229).

      As explained supra, a party challenging the Commission’s determination under

the substantial evidence standard “has chosen a course with a high barrier to reversal.”

Mitsubishi, 275 F.3d at 1060.      “[E]ven if it is possible to draw two inconsistent

conclusions from evidence in the record, such a possibility does not prevent [the

Commission’s] determination from being supported by substantial evidence.”          Am.

Silicon Techs. v. United States, 261 F.3d 1371, 1376 (Fed. Cir. 2001). Here, it is

significant that the trade court already had accepted the Commission’s findings on the

first two factors supporting its affirmative material injury determination: volume and

impact. It is dispositive, however, that ample evidence existed on both sides of the

remaining factor, price effects, and on the question of causation.      Evidence of an

industry cost-price squeeze—as a whole and thus necessarily for some producers




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individually—may or may not outweigh the existence of positive operating margins for

the two domestic producers competing most directly with Japan.           The existence of

inconsistencies between a purchaser’s questionnaire responses and testimony means

that this record contained potentially credible evidence on both sides of the issue.

Likewise, the existence of factors suggesting that domestic and Japanese negotiations

do, or do not, take place on equal footing, and the question of whether to discount

Weirton’s unimpeached testimony for lack of contemporaneous documentation, relate to

credibility and the proper weight of evidence; the resolution of these questions must be

left to the expert factfinder.

       The Court of International Trade’s rejection of the Commission’s error in

calculation is permissible, indeed required, under the substantial evidence standard of

review, which intends that a reviewing court correct exactly this type of obvious error.

However, when the totality of the evidence does not illuminate a black-and-white

answer to a disputed issue, it is the role of the expert factfinder—here the majority of the

Presidentially-appointed, Senate-approved Commissioners—to decide which side’s

evidence to believe. So long as there is adequate basis in support of the Commission’s

choice of evidentiary weight, the Court of International Trade, and this court, reviewing

under the substantial evidence standard, must defer to the Commission.

                                            IV

       The United States also argues that the Court of International Trade acted ultra

vires in directing the Commission to enter a negative material injury determination, and

asserts that § 1516a does not permit the court to reverse a determination of the

Commission, directly or indirectly. We have stated in dicta that “[s]ection 1516a limits




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the Court of International Trade to affirmances and remand orders; an outright reversal

without a remand does not appear to be contemplated by the statute.” Altx, 370 F.3d at

1111 n.2. However, we implied the opposite in Atlantic Sugar, also in dicta, where we

said that if the evidence supporting a material injury determination is “insubstantial, then

the reviewing court must either reverse the [Commission]’s determination or remand the

case for further fact-finding.” 744 F.2d at 1561. Because, here, substantial evidence

supports the Commission’s original affirmative material injury determination, we need

not and do not decide the scope of Court of International Trade authority to reverse

under § 1516a. It may well be that, in another situation, the trade court may be faced

with a Commission determination that is unsupported by substantial evidence, and for

which a remand would be “futile.” Nippon IV, 350 F. Supp. 2d at 1222. We hold only

that this is not the case today.

                                             V

       For the reasons articulated above, we hold that the Court of International Trade

erred in assessing credibility and in reweighing the evidence before the Commission,

and erred in concluding that the Commission’s finding of material injury to the domestic

injury was not supported by substantial evidence. Accordingly, we reverse the Court of

International Trade’s decisions in Nippon IV and Nippon V, set aside the Commission’s

negative material injury and negative threat of material injury determinations in TRD,

and direct that the trade court reinstate the Commission’s affirmative material injury

determination in SRD.

                                       REVERSED.




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