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On April 20, 2017, the Commission heard oral argument Certain carbon and alloy steel products, Inv. No. 337-TA-1002, in its review of Lord J.’s original decision dismissing the antitrust claims of the plaintiff US Steel. Arguments have largely focused on the applicability of antitrust status requirements for cases brought under federal antitrust laws to antitrust complaints filed under Section 337.
- Background
The main issue before the Board is whether the antitrust standing requirement for federal district court actions brought by a private party applies to section 337 antitrust investigations. The federal antitrust position requires a demonstration of the prejudice to competition that arises from the alleged anti-competitive conduct. In its complaint, US Steel did not allege that it had antitrust standing, and instead argued that this standing did not apply to ITC proceedings. Lord J. disagreed and rendered an initial decision dismissing the antitrust allegations and finding that the antitrust standing requirement applied to Section 337 investigations. We have already covered the initial determination in a previous article. The Commission is currently reviewing Lord Justice’s dismissal of US Steel’s antitrust complaints and held the April 20 hearing as part of its review.
Oral hearings before the Commission in Section 337 inquiries are rare, and the Commission has used the format it follows for Title VII hearings. The format included opening statements by parties, followed by a series of panels which answered questions from the Commissioners. The panels consisted of counsel for the complainant US Steel, counsel for the respondent Bao Steel, and counsel for the Commission’s Office of Unfair Import Investigation (OUII), respectively. The hearing lasted about six hours. While other federal agencies were encouraged to submit comments, no federal agency informed of the issues or appeared at the hearing. Members of the United Steel Workers attended the hearing on behalf of US Steel, but did not testify.
- Content of the hearing
During the hearing, US Steel argued that the antitrust standing requirement applicable in private antitrust actions in federal court is not applicable in Section 337 proceedings. Instead, because Section 337 was intended to protect domestic industries, proof of injury to an American industry and American workers is sufficient to bring an antitrust action to the ITC, and proof of injury competition is not required.
Respondent Bao Steel, a major Chinese steel producer, argued that the antitrust standing requirement applies to Section 337 proceedings. He argued that, since the antitrust claims arise of Sherman Act, the corresponding precedent – including the requirement of anti-competitive standing – applies to antitrust-based claims brought to the ITC. OUII agreed that the antitrust standing requirement applies to section 337 actions brought by private parties. However, OUII argued that when an antitrust action is initiated by the Board, a demonstration of antitrust quality is not required. OUII argued that, in a self-initiated Section 337 antitrust investigation, the role of the Commission was similar to that of the Federal Trade Commission or the Department of Justice in antitrust actions brought by those agencies, where the antitrust grade is not required. OUII explained that, in such self-initiated actions, the Commission would not initiate unless it had already determined that it was in the public interest to proceed with the antitrust allegation. .
- Next steps
The Commission initially included three causes of action in this investigation: antitrust practices, trade secret misappropriation and false appellation of origin (see our prior message regarding the initiation of the investigation). US Steel withdrew its trade secret misappropriation complaint in February. The request for a false designation, which had been rejected by Lord J., was sent back to the judge for a hearing. There is no fixed date for the Board’s decision regarding the judge’s dismissal of the antitrust action. The target date for the completion of the entire survey is currently set for April 18, 2018.
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