On April 20, 2017, the Commission heard oral arguments in Certain carbon and alloy steel products, Inv. No. 337-TA-1002, in its review of Lord J.’s original decision dismissing plaintiff US Steel’s antitrust claims. The arguments largely centered on the applicability of antitrust quality requirements for cases brought under federal antitrust laws to antitrust complaints brought under Section 337.
The primary issue before the Commission is whether the antitrust standing requirement for actions in federal district courts brought by a private party applies to antitrust investigations based on Section 337. The federal antitrust statute requires a demonstration of the harm to competition that results from the alleged anti-competitive conduct. In its complaint, US Steel did not allege that it had antitrust status and instead argued that antitrust status did not apply to ITC proceedings. Lord J. disagreed and issued an initial ruling dismissing the antitrust claims and finding that the antitrust standing requirement applies to Section 337 investigations. We previously covered the initial determination in a previous post. The Commission is currently reviewing Judge Lord’s dismissal of US Steel’s antitrust claims and conducted the April 20 hearing as an extension of its review.
Oral hearings before the Commission in Section 337 investigations are rare, and the Commission has used the format it follows for Title VII hearings. The format included opening statements from the parties, followed by a series of panels that answered questions from the commissioners. The panels were composed of counsel for Complainant US Steel, counsel for Respondent Bao Steel, and counsel from the Commission’s Office of Unfair Import Investigations (OUII), respectively. The hearing lasted approximately six hours. While other federal agencies were encouraged to submit comments, no federal agency briefed the questions or appeared at the hearing. Members of the United Steel Workers attended the hearing on behalf of US Steel, but did not testify.
- Hearing content
During the hearing, US Steel argued that the antitrust quality requirement applicable in private antitrust actions in federal court is not applicable in Section 337 proceedings. Instead, since Section 337 was intended to protect domestic industries, showing harm to a US industry and US workers is sufficient to file an antitrust complaint with the ITC, and proof of harm to the competition is not required.
The respondent Bao Steel, a major Chinese steel producer, argued that the competition standing requirement applies to Section 337 proceedings. that antitrust claims arise under the Sherman Act, the corresponding precedent – including the requirement of antitrust standing – applies to antitrust claims brought before the ITC. OUII agreed that the antitrust quality requirement applies to Section 337 actions brought by private parties. However, OUII argued that where an antitrust action is initiated on its own initiative by the Commission, a demonstration of antitrust standing is not required. OUII argued that, in a self-initiated antitrust investigation based on Section 337, the Commission’s role is akin to that of the Federal Trade Commission or the Department of Justice in antitrust actions brought by those agencies, where antitrust quality is not required. OUII explained that, in such self-initiated actions, the Commission would not institute unless it had already determined that it was in the public interest to move forward with the alleged antitrust complaint. .
- Next steps
The Commission originally included three causes of action in this investigation: antitrust, misappropriation of trade secrets, and false designation of origin (see our previous message concerning the initiation of the investigation). US Steel withdrew its misappropriation of trade secret complaint in February. The false designation claim, which had been dismissed by Lord J., was sent back to the judge for a hearing. No date has been set for the Commission’s decision on the judge’s dismissal of the antitrust complaint. The target date for the completion of the entire investigation is currently April 18, 2018.