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Importer Says ITC Illegally Started Injury Case on Freight Rail Couplers From China, Mexico

The International Trade Commission's decision to find that freight rail couplers from China and Mexico injured the domestic industry was not backed by substantial evidence, given its finding in a separate, previously conducted investigation that the couplers just from China did not injure the U.S. industry, importer Wabtec Corp. argued in a Sept. 13 complaint at the Court of International Trade (Wabtec Corp. v. U.S., CIT # 23-00157).

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The Tariff Act of 1930 says the ITC can't review a past negative determination within 24 months of its publication without "good cause." Here, the commission failed to find that the petitioner must show good cause to review the negative decision, declare that the petitioner "did not and could not show good cause," and find that the petitioner "was seeking a review of the Commission's prior determination." The ITC also failed to account for its prior negative determination in making the new affirmative injury finding, the complaint said.

In the first investigation, reviewing the 2019-21 period, the commission originally said freight rail couplers and parts thereof from China didn't injure the domestic industry. While it said the volume of the imports was significant, no injury was found, given the lack of a "causal nexus" between the shipments and the domestic industry's performance. Less than two years after these results' publication, the petitioner returned to the ITC and in a new set of AD/CVD petitions said freight rail couplers from China, and also Mexico, were harming the industry.

In its complaint, Wabtec challenged the decision to cumulate the imports from these two countries. The company said the commission's cumulation decision violates the Tariff Act, and that the ITC erroneously said that the current investigation isn't the same as its past one and that a "negative determination in a prior investigation is not the same as a termination in these investigations."

Wabtec also argued against the ITC's price effect and injury findings, telling the trade court that the imports lost market share to the domestic like product despite the underselling by the imports. The commission "improperly focused on price and [cost of goods sold]-to-net-sales ratio trends from 2020 to 2021 while discounting trends between 2021 and 2022 because of the provisional duties from" the first investigation on the products from China, the complaint said. The ITC also failed to explain its reliance on "contemporaneous business documents" given by the petitioner that were rejected in the first investigation.

Wabtec also filed complaints in two cases challenging the antidumping and countervailing duty orders that came as a result of the injury proceeding. In those briefs, the importer said Commerce improperly "refused to modify the scope to exclude FRCs attached to railcars." The Commerce Department illegally treated the inquiry on whether a freight rail coupler is a separate class or kind of good as a mounted freight rail coupler as opposed to a railcar, the complaints said.

An element of the present injury investigation was previously before the trade court but was dismissed. Importer Amsted Rail Co., along with Wabtec, raised ethical concerns about previous counsel for ARC and present counsel for the petitioner, Daniel Pickard of Buchanan Ingersoll (see 2307190021). The companies dropped their suits on this issue after the trade court dismissed them for lack of subject-matter jurisdiction.