UNITED STATES INTERNATIONAL TRADE COMMISSION
`
`Washington, D.C.
`
`1
`
`In the Matter of
`
`CERTAIN CARBON AND ALLOY
`
`Inv. No. 337-TA-1002
`
`STEEL PRODUCTS
`
`ORDER NO. 46:
`
`INITIAL DETERMINATION TERMINATING FALSE
`
`DESIGNATION CLAIM DUE TO NON-COMPLIANCE WITH
`
`COMMISSION RULE 210.12(a)(3)
`
`(January 11,2017)
`
`Pursuant to Commission Rules 210.21 and 210.18 and for good cause shown,
`
`Complainant United States Steel Corporation’s claim under section 337(a)(1)(A)(i) of the Tariff
`
`Act of 01930, as amended, for false designation of origin under the Lanham Act, 15 U.S.C. §
`
`1125(a)(1), is hereby terminated. 19 U.S.C. § 1337(a)(1)(A)(i); 19 C.F.R. § 210.21; 19 C.F.R. §
`
`210.18; 19 C.F.R. § 210.12(a)(3).‘
`
`I.
`
`BACKGROUND
`
`A. The Complaint
`
`The Commission instituted this investigation to determine, inter alia, whether there is a
`
`violation of section 337(a)(1)(A)(i) in the importation, the sale for importation, and the sale
`
`within the U.S. after importation of certain carbon and alloy steel products by reason of false
`
`designation of origin or manufacturer. 81 Fed. Reg. 35381-82 (2016); Notice of Investigation
`
`1 With the exception of the pending motion for sanctions (Motion Docket No. 1002-048), the
`parties’ pending motions and discovery requests that relate to the false designation claim are
`hereby denied as moot.
`
`

`
`(May 26, 2016) at 2.2 In its amended complaint (the “complaint”) Complainant United States
`
`Steel (“US Steel”) alleges that the manufacturer respondents evade U.S. anti-dumping and
`
`countervailing duty orders on Chinese steel imports by submitting false documents and
`
`transshipping products “through other countries to disguise the steel’s country of origin and
`
`manufacturing mill from U.S. Customs and to deceive domestic steel consumers.” Compl. at 11
`
`126.3 U.S. Steel alleges that, “These constitute unfair acts in violation of the Lanham Act, 15
`
`U.S.C. § 1125(a)(1).” Id.
`
`In support of these allegations, U.S. Steel presents statistical evidence showing that,
`
`“After the Commerce Department initiated countervailing duty and anti-dumping investigations
`
`in 2009, OCTG shipment volumes from Malaysia, Thailand, Taiwan, and Vietnam began to
`
`-increase’ over historical norms.” Id at 11 129.4 The complaint alleges that shipments of
`
`corrosion-resistant steel from Vietnam also “spiked” after the Commerce Department “began
`
`considering duties on Chinese steel.” Id at 11 130. The complaint alleges that “the same
`
`happened with cold-rolled steel.” Id at 11 13-1. U.S. Steel says it “is not aware of significant
`
`2 The Commission also instituted this investigation to determine whether there is a violation of
`section 337 by reason of a conspiracy to fix prices and control output and export Volumes, the
`threat or effect of which is to restrain or monopolize trade and commerce in the United States,
`and misappropriation and use of trade secrets. 81 Fed. Reg. 35381-82; Notice of Investigation
`(May 26, 2016) at 2’. On November 14, 2016, the pricing-fixing claim was terminated for failure
`to state a claim on which relief can be granted. Order No. 38, review granted, 81 Fed. Reg.
`94416-17 (Dec. 23, 2016).
`
`3 The manufacturer respondents participating in this investigation are China Shougang
`International Trade & Engineering Corporation (“Shougang”), Masteel Iron and Steel Co. Ltd.,
`Magang (Group) Holding Co. Ltd. (“MaSteel”), Anshan Iron and Steel Group, Angang Group
`International Trade Corporation, Angang Group Hong Kong Co. Ltd. (“AnSteel”), Wuhan Iron
`and Steel Group Corp., Wuhan Iron and Steel Co., 'Ltd., WISCO America Co., Ltd., Baosteel
`America, Inc. (“Wuhan”), Shanghai Baosteel Group Corporation, Baoshan Iron & Steel Co., Ltd.
`(“Baosteel”), Hebei Iron and Steel Group Co., Ltd., Hebei Iron & Steel Group Hengshui Strip
`Rolling Co., Ltd., Hebei Iron & Steel (Hong Kong) International Trade Co., Ltd. (“Hebei”),
`Jiangsu Shagang Group, and Jiangsu Shagang International Trade Co., Ltd. (“Shagang”).
`4 “OCTG” stands for oil-country tubular goods. Compl. ‘H 93.
`
`2
`
`

`
`increases in local manufacturing capacity that could account for these countries’ changing export
`
`volumes,” and alleges that, with “the help of” the distributor respondents, the manufacturer
`
`respondents create false origin documents and transship Chinese steel through foreign countries
`
`to avoid U.S. duties. Id. at 1111 132, 133.5
`
`The complaint describes a series of electronic communications between individuals
`
`identified as prospective customers, who purport to be interested in purchasing steel products,
`
`and representatives of distributor respondents, who offer to provide steel made in Chinese mills
`
`for import into the United States with false designations of origin. Compl. at 111] 134-138. On the
`
`basis of such communications, the complaint alleges, respondents “evade U.S. duties by falsely
`identifying the country of origin for their products.” Id at 111] 138-181.
`
`U-.S. Steel alleges that the distributor respondents “were broadly willing to engage in
`
`transshipping and falsifying documents,” and that “[m]ill certificates provided by” the distributor
`
`respondents “demonstrate that they regularly do business with” the manufacturer Respondents.
`
`Id. at 11 184. “Moreover,” the complaint continues, “statistics suggest that transshipping occurs
`
`on a large scale across multiple countries.” Id. “US. Steel therefore believes that discovery will
`
`demonstrate” that the manufacturer respondents “encourage and participate in false labeling.”
`
`Id.
`
`5 The distributor respondents are EQ Metal (Shanghai) Co., Ltd.; Kunshan Xinbei International
`Trade Co., Ltd.; Taian INC Industrial Co., Ltd.; Tianjin Tiangang Guanye Co., Ltd.; Tianjin
`Xinhai Trade Co., Ltd.; Tianjin Xinlianxin Steel Pipe Co., Ltd.; Tianjin Xinyue Industrial and
`Trade Co., Ltd.; Wuxi Sunny Xin Rui Science and Technology C0,, Ltd.; and Xian Linkun
`Materials (Steel Pipe Supplies) Co., Ltd. Compl. 1111 60-68. All of these respondents were
`defaulted ‘pursuant to Order No. 32 (Sept. 14, 2016), not rev ’d by Comm’n Notice (Oct. 14,
`2016).
`
`

`
`B. Order to Show Cause
`
`On December 5, 2016, I issued an order to show cause regarding U.S. Steel’s failure to
`
`allege facts showing actual importation for its false designation claim. Order No. 41. The order
`
`stated that in reviewing respondents’ pending motion to dismiss U.S. Steel’s false‘ designation
`
`claim, “it was discovered that U.S. Steel’s allegations of unfair importation are not supported by
`
`direct factual evidence.” Id at 2. Order No. 41 discussed the lack of any “direct evidence that
`
`any named respondent actually imported any steel with a false designation of origin.” Id The
`
`order noted that the exhibits attached to the complaint also do not furnish any evidence of a
`
`specific instance of importation.
`
`Id. at 2.6
`
`6 The pleading defect, which was discovered in the course of reviewing respondents’ motion to
`terminate Complainant’s claim of unfair acts under section 43 (a) of the Lanham Act, Motion
`Docket No. 1002-034, is not a mere technicality;
`it goes to the question whether U.S. Steel has
`stated a claim under the Lanham Act upon which relief can be granted. The standard for stating
`a claim upon which relief can be granted is plausibility. To avoid dismissal a plaintiff must
`allege “enough facts to state a claim to relief that is plausible on its_ face.” Bell Atlantic Corp. v.
`Twombly, 550 U.S. 544, 570 (2007). Plausibility requires “more than an unadorned, the-
`defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A
`claim has facial plausibility when the plaintiff pleads factual content that allows the court to
`draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. The
`plausibility standard is not akin to a “probability requirement,” but asks for more than a sheer
`possibility a defendant acted unlawfully.
`Id.
`
`To make out a claim under section*337 for violation of the Lanham Act, the complainant must
`show “some evidence of either consumer confusion as a result of the failure to mark
`conspicuously the country of origin or a consumer preference for a domestically produced item. .
`. .” Certain Soft Sculpture Dolls Popularly Known as “Cabbage Patch Kids, ” Related Literature
`and Packing Therefor, Inv. No. 337-TA-231, Views of the Comm’n at 9-10 (Nov. 1986). “If
`consumers did not have a preference for the domestic article, then there would be no injury from
`the improper marking.” Id. at 28. To state a claim under section 337, therefore, a complaint
`must allege facts and circumstances bearing on the element of consumer confusion or
`preference. Due to the absence in the complaint of detailed information concerning importation,
`it is impossible to discern what allegedly happens when the accused product gets to the
`consumer. There is no factual basis for finding it plausible that consumers are confused or prefer
`American steel to the accused Chinese steel. This defect would be an alternative ground for
`dismissal, but this order does not reach the merits of U.S. Steel’s Lanham Act claim, and Motion
`Docket No. 1002-034 is hereby denied as moot.
`
`'
`
`

`
`In its pleadings in response to Order No. 41,7 U.S. Steel says the importations referred to
`
`under “SPECIFIC INSTANCES OF UNFAIR IMPORTATION” in paragraphs 187-201 of the
`
`complaint, see also Compl. Exs. 44, 55, and 56, do not, and were not intended to, describe
`
`specific instances of unfairimportation due to false designation of origin. U.S. Steel’s
`
`Responsive Br. at 4 (“For purposes of the false designation of origin claim, the Datamyne data
`
`[in the referenced exhibits 44, 55, and 56] only show that Respondents traffic in Chinese steel
`
`bound for the United States. The Complaint uses other evidence to show that Respondents
`
`participate in transshipment and sales for importation of falsely designated Chinese steel to the
`
`United States”), 5 (“The omission of Datamyne’s country of origin information is immaterial
`
`because Datamyne’s information is not — and was never intended to be — dispositive for U.S.
`
`Steel’s false designation claim.”) U.S. Steel asserts that Exhibits 44, 55, and 56 apply to “all of
`
`the unfair acts alleged .
`
`.
`
`. not solely in relation to false designation”). Id. at n.1. The
`
`complaint, however, belies this attorney argument.
`
`In the paragraph immediately following paragraphs 187-201, the complaint plainly
`
`relates those paragraphs to the false designation claim, summing up the facts alleged in
`
`paragraphs 187-201. Compl. ‘H 202. Indeed, U.S. Steel concedes as much. U.S. Steel’s Opening
`
`Br. at 7 n.4 (quoting 11 202 and stating, “That paragraph summarizes the allegations of several
`
`prior paragraphs by concluding, ‘[b]ased on these facts, it is likely that Proposed Distributor
`
`Respondents have sold Chinese carbon" and alloy steel products for importation to the United
`
`States, even where a specific importer is currently unknown.”’). After Order No. 41 pointed out
`that the importations listed in paragraphs 187-201 disclosed China as the origin ofthe shipments,
`
`7 Order No. 41 called for two sets of pleadings by each party. Order No. 41 at 5. Because Order
`No. 41-did not specify how the parties’ submissions were to be styled the style is not uniform,
`which is confusing. In this decision, I use the various titles given to the pleadings by the
`respective parties, to make it easier for the reader to identify them.
`
`5
`
`

`
`and therefore could not represent instances of false designation, U.S. Steel conceded that
`
`Exhibits 44, 55, and 56 (the exhibits referred to under “SPECIFIC INSTANCES OF UNFAIR
`
`IMPORTATION”) did not set forth specific instances of unfair importation due to false
`
`designations
`
`Order No. 41 noted that the failure to describe a specific sale or importation raised
`
`jurisdictional issues that would be decided by assuming jurisdiction to determine whether U.S.
`
`Steel’s complaint states a claim on which relief can be granted. Order No. 41 at 4-5 (citing
`
`Amgen, Inc. v. United States Int ’l Trade Comm ’n (Amgen I), 902 F.2d 1532, 1536 (Fed. Cir.
`1990). Order No. 41 also specifically referenced Commission Rule 2l0.l2(a)(3) and stated that
`
`failure to comply with its requirements “may require termination of this claim.” Id at 3-4 (citing
`Certain Wireless Communication Chips and Chipsets, and Products Containing Same, including
`
`Wireless Handsets and Network Interface Cards (“Wireless Communication ”), Inv. No. 337-
`
`TA-614, Order No. 5 at 22-26 (Oct. 18, 2007), not rev ’d by Comm’n Notice (Nov. 21, 2007)).
`
`On consideration of the submissions made in response to Order No. 41, I have
`
`determined that U.S. Steel’s false designation claim must be terminated due to U.S. Steel’s
`
`failure to comply with Commission Rule 2l0.l2(a)(3). As discussed below, when a complaint
`
`fails to comply with Rule 2l0.12(a)(3), it fails to state a claim on which relief can be granted and
`
`must be dismissed, as a matter of law.9 This decision rests on the complaint’s failure to comply
`
`8 The defect cannot be fixed by rolling three separate claims for relief into one complaint, as U.S.
`Steel has done. Each distinct claim is subject to the requirements of Rule 2l0.l2(a)(3).
`
`9 U.S. Steel has not sought to amend the complaint to correct the pleading defect and does not
`maintain in any of its submissions that it possesses evidence of any specific instance of
`importation. Under these circumstances, granting leave to amend the complaint, if such leave
`were requested as required by the Commission, see Rule 2lO.14(b)(l), wouldbe futile. U.S.
`Steel and Staff argue that U.S. Steel should be permitted to conduct discovery in an effort to find
`evidence of a specific instance of importation, but permitting discovery for that purpose would
`be contrary to law. “The role of discovery [] is to find support for properly pleaded claims, not
`
`6
`
`

`
`with Rule 210.12(a)(3), which is more exacting than section 337. See Syntex Agribusiness, Inc.
`
`v. Int’! Trade Comm ’n, 659 F.2d 1038, 1047 (C.C.P.A. 1981) (noting as “persuasive” ITC’s
`
`argument that “notice pleadings, of the type which are sufficient under Rule 8(a) of the Federal
`
`Rules of Civil Procedure .
`.
`. are inadequate for ITC purposes; and ITC rule 210.20 reasonably
`requires much more.”) (Nies, J., concurring). A number of issues that were briefed by the parties
`
`in response to Order No. 41 need not be decided in light of the narrow ground for this decision.”
`
`II.
`
`DISCUSSION
`
`A. Commission Rule 210.12(a)(3) requires a description of specific instances of
`unlawful importation or sale.
`
`The Commission’s rules on pleadings appear at 19 C.F.R. § 210.12. Commission Rule
`
`210.12(a) provides under the heading “Contents ofthe complaint.” that “the complaint shall -- .
`
`.
`
`. (3) Describe specific‘ instances of alleged unlawful importations or sales .
`
`.
`
`. .” 19 C.F.R. §
`
`210.12(a)(3) (emphasis added). On its face, Rule 210.12(a)(3) applies to all complaints at the
`
`ITC. U.S. Steel’s complaint does not satisfy the rule. The complaint asserts that it is “likely”
`
`that unlawful importations have occurred, see Compl. 1[ 202, but contains no description of
`
`specific instances.
`
`Waiving the requirements of the rule as written would be unprecedented and contrary to
`
`law. The Trade Act of 1930 authorizes the Commission “to adopt such reasonable procedures
`
`and rules and regulations as it deems necessary to carry out its functions and duties.” 19 U.S.C.
`/A.
`
`to find the claims themselves.” Torch Liquidating Trust ex rel. Bridge Assocs. LL. C. v.
`Stoclcstill, 561 F.3d 377, 391-92 (5th Cir. 2009).
`'
`
`10 In particular, failure to plead in accordance with the Commission’s rules is not jurisdictional,
`whereas failure to plead importation or sale in accordance with section 337 would be
`jurisdictional. See 19 U.S.C. § l337(a)(l)(A).
`I have not decided herein that the complaint fails
`to satisfy the statute, and I need not reach the statutory question because the Commission’s rule
`on pleading is stricter than the statute.
`I
`
`

`
`§ 1335. Pursuant to this authority, the Commission has adopted the rules governing pleading in
`section 19 CFR’. § 210.12. These rules have the force and effect of law. “One ofthe most
`
`firmly established principles in. administrative law is that an agency must obey its own rules.”
`
`Charles H. Koch, Jr., Administrative Law and Practice (“Koch”) § 4:22 at 305 (3d ed. 2010).
`
`“Federal courts accept this notion as a fundamental principle.” Id. at 306; see, e.g., Conservancy
`
`ofSouthwest Florida v. US. Fish & Wildlife Service, 677 F.3d 1073, 1078, note 10 (11th Cir.
`
`2012) (“An agency’s failure to follow its own regulations is arbitrary and capricious.”) (citing
`
`Simmons v. Block, 782 F.2d 1545, 1550 (11th Cir. 1986)); Wilson v. Comm ’r, 378 F.3d 541, 545
`
`(6th Cir. 2004) (“It is an elemental principle of administrative law that agencies are bound to
`
`follow their own regulations”); Centerfor Auto Safety v. Dole, 828 F.2d 799, 805 (D.C. Cir.
`
`1987) (recognizing that “a court will require an agency to follow the legal standards contained in
`
`its own regulations despite the fact that a statuteihas granted the agency discretion in the
`
`matter”). These firmly established legal principles apply under section 337. Syntex, 659 F.2d at
`
`1046 (“[I]n light of the procedures for Investigations of Alleged Unfair Practices in Import Trade
`
`set forth in 19 CFR 210.1 et seq., as authorized by sections 333 and 335 of the Tariff Act of 1930
`
`(19 U.S.C. §§ 1333 and 1335), it is clear that Syntex’s revised complaint must comply with 19
`
`CFR 210.20, which sets for the requirements for a section 337 complaint.”) (citing Sealed Air
`
`Corp. v. US. rm’; Trade Comm ’n, 645 F.2d 976, 987 (Cust. & Pat. App. 1981))“
`
`Administrative law judges, like other agency employees, are required to abide by the
`
`agency’s rules; “Whatever law emerges about the effect of rules on the agency, it seems that a
`
`rule or statement should have equal effect on all units of the agency, including administrative
`
`11 Syntex cites 19 CFR 210.20, which is the predecessor to Commission Rule 210.12, and
`included a requirement that the complaint “[d]escribe specific instances of alleged unlawful
`importations or sales.” Syntex, 659 F .2d at 145 n.4.
`
`«
`
`

`
`judges.” Koch, § 4:22 at 313. An agency’s ALJs, “although independent, [] are part of the
`
`agency for the purpose of determining the law that applies to them.” Id. at 314.12
`
`Commission ALJS must and do apply the Commission’s pleading requirements.
`
`In‘
`
`Certain Semiconductor Integrated Circuits Using Tungsten Metallization & Prod. Containing
`
`Same, Inv. No >337-TA-648, Order No. 34, 2009 WL 506053 (Jan 14, 2009), the ALJ denied a
`
`motion to amend a complaint to add two respondents because of insufficient evidence of
`
`importation. 2009 WL 506053 at *2 (deciding “it is not clear that the .
`
`.
`
`. information upon ,
`
`which complainants base their infringement allegations necessarily relates to imported products.
`
`Additionally, the importation allegations .
`
`.
`
`. remain unsubstantiated.”). In Wireless
`
`Communications, 337-TA-614, supra, the ALJ terminated an investigation “in toto” based on
`
`several provisions of Rule 210.12 including Rule 210.l2(a)(3). 2007 WL 3342252\at *8
`
`(holding that “the broad allegations of importation in the complaint do not comply with
`
`Commission Rule 2l0.l2(a)(3), requiring ‘specific instances’ of importation.”). Similarly, the
`
`ALJ in In the Matter ofEprom, Eeprom, Flash Memory, & Flash Microcontroller
`
`Semiconductor Devices & Prod Containing Same, declined to permit amendment where the
`
`proposed amendment “does not meet the requirements of Commission rule 210.12 for the
`
`contents of a complaint.” Inv. No. 337-TA-395, Order No. 18, 1997 WL 817748 at *3 (Aug. 27,
`
`1997). In Certain Active Comfort Footwear (“Footwear”), Inv. No. 337-TA-660, Order No. 4 at
`
`2, 2009 WL 434797 (Feb. 11, 2009), the ALJ denied a motion to amend a complaint as to a
`
`12 This is not to say that an ALJ is powerless to affect agency policy. “The role of administrative
`judges in policymaking is considerable.” Koch, § 5:26 at 77. The ALJ raises policy issues to
`the ultimate agency decision-makers by applying “general policy to individual disputes.” Id. at
`
`78. An ALJ’s decisions, “[A]lthough they are subj ect to administrative and judicial review .
`
`.
`
`.
`
`have a significant role in developing the law and policy of the agency.” Id at 73. Of course, the
`
`“independence” of ALJs is qualified by the requirement that they abide by agency rules and
`
`policies, as discussed above.
`
`

`
`proposed distributor respondent because the complainant had not demonstrated with sufficient
`
`evidence that the proposed respondent “actually imports, sells for importation, or sells products I
`
`that are alleged to infringe the asserted patent.” The ALJ held that the complainant had not
`
`presented sufficient evidence that the proposed respondent actually sold accused products, but
`
`“only that it held itself out as a distributor.” Ia’.
`
`U.S. Steel cites two cases that it says were instituted on complaints less specific than the
`
`one before me. U.S. Steel Opening Br. at ll. With regard to Certain Bearings and Packaging
`
`Thereof (“Bearings ”), Inv. No. 337-TA-469, U.S. Steel cites to paragraphs of the amended
`
`complaint that were withdrawn by the complainant, see EDIS Doc. 65695 (Mar. 29, 2002); in
`
`fact, the investigation was not instituted as to the proposed respondent, Bearing Discount, which
`
`was named in those paragraphs. See Notice of Investigation, EDIS Doc. 65697 (Apr. 10, 2002).
`
`U.S. Steel also cites Certain Multiple Implement, Multi-Function Pocket Knives and Related
`
`Packaging and Promotional Materials (“Pocket Knives”), Inv. No. 337-TA-398, 1997 WL
`
`34728619, First Amended Compl. 11 43 (Mar. 28, 1997) (“‘On information and belief, China
`
`Light exports such [infringing] knives to distributors and‘/or retailers who then resell them to
`
`customers throughout the United States.’”). U.S. Steel’s Opening Br. at 8 n.
`
`The first
`
`amended complaint in Pocket Knives did not go forward until a second amended complaint had
`
`been filed at the instigation of Staff. See Respondents’ Reply Br. at 8, note 5 (citing and quoting
`
`5 Pocket Knives, Cover Letter attaching Second Amended Complaint, EDIS Doc. 169539 (May 8,
`
`1997) (noting filing of second amended complaint “‘contain[ing] fiirther information requested
`)7?
`
`by the Office of Unfair Import Investigations.
`
`). The second amended complaint contained
`
`more specific information than the first, exhibiting an article from a trade publication that
`
`identified Arrow, the specific respondent in the investigation, as the importer of knives “made by
`
`10
`
`

`
`the Shanghai, China, branch of the China Light Industrial Products Import and Export Co. .
`
`.
`
`.
`
`the largest maker of pocketknives in Shanghai.” Pocket Knives, Second Amended Complaint,
`
`EDIS Doc. 169539, at ‘H 43, Exhibit 117. The investigation was instituted only after the second
`
`amended complaint was filed. See Notice of‘Investigation, EDIS Doc. 169544 (May 20, 1977).”
`
`B. U.S. Steel’s arguments regarding circumstantial evidence are unavailing because
`
`U.S. Steel’s complaint presents insufficient circumstantial evidence of any specific
`
`act of importation.
`
`‘ U.S. Steel and Staff maintain that direct evidence is unnecessary under Commission Rule
`
`210. l2(a)(3), and that U.S. Steel has presented sufficient circumstantial evidence to satisfy the
`
`rule. U.S. Steel Opening B1‘. at 4-5, citing Amgen 11, 565 F.3d at 853.” This argument fails
`
`because Rule 210. l2(a)(3) requires more than circumstances that give rise to an inference that
`
`some unfair act has occurred somewhere at some time. _The Commission’s rule in plain words
`
`requires a description of specific instances of unfair importation or sale. U.S. Steel has failed to
`
`allege facts that, taken as true (as they must be at this stage of the proceeding), describe any
`specific unfair importation or sale—even circumstantially.
`
`U.S. Steel presents statistical evidence giving rise to an inference that transshipment of
`
`Chinese steel has occurred. Statistical evidence by its nature may give rise to an inference that a
`
`specific occurrence is likely but carmot by itself describe a specific instance. U.S. Steel says
`
`statistical evidence in combination with other evidence in its complaint, “viewed as a whole,”
`
`13 It may be that the application of Rule 21 0. l2(a)(3) can vary depending on the nature of the
`claim of unfair importation. But the rule must mean something—it cannot be ignored in the
`hope that discovery will yield the specific facts that should be described in the complaint.
`
`14 U.S. Steel’s citation to Amgen II is inapposite. Amgen II was a patent case in which it was
`undisputed that “Roche has imported EPO,” 565 F.3d at 853, and that the imported EPO
`allegedly violated the Amgen patent. The problem in this case is that U.S. Steel has accused an
`entire commodity without specifying, even on information and belief, identifiable steel that was
`sold or imported in violation of section 337, much less when, where, or by whom.
`
`11
`
`

`
`suffices to satisfy the rule. _From the additional allegations in U.S. Steel’s complaint it can be
`
`inferred that particular parties would be willing to import products unfairly or may have done so
`
`on some occasion in the past, but such evidence does not identify a specific instance of
`
`importation or sale.
`
`Rule 2l0.12(a)(3) can be satisfied by circumstantial evidence but has not been satisfied
`
`by U.S. Steel’s complaint in this case.” The rule requires a description of particular steel which,
`
`based on facts or reasonable inferences from facts, was made in China, shipped from another
`
`country, and arrived in the United States labelled as steel from that other country. If those facts
`
`could be inferred from the circumstances, allegation of those facts would satisfy the rule. No
`
`such factual allegations appear in U.S. Steel’s complaint.
`
`Framing its argument about ‘circumstantial evidence slightly differently, U.S. Steel says
`
`that pleading “on information and belief’ is permissible under Rule 2l0.l2(a)(3). U.S. Steel’s
`Opening Br. at 4. Again, if U.S. Steel had pled specific instances of sale or importation based on
`
`infonnation and belief, such allegations might well be sufficient. But U.S. Steel did not do so.
`
`Instead, the complaint alleges only that “it is likely” that the distributor respondents “have sold
`
`Chinese carbon and alloy steel products for importation into the United.States, even where a
`
`specific importer is currently unknown.” Compl; at ‘H 202 (emphasis added). In other words, the
`
`‘complaint concedes that U.S. Steel cannot identify any particular steel that was sold or imported
`
`in violation of section 337, even on information and belief.
`
`15 Circumstantial evidence is “evidence that tends to prove a fact by proving other events or
`circumstances which afford a basis for a reasonable inference of the occurrence of the fact at
`
`issue.” Circumstantial evidence. (2017). Merriam—Webster. Retrieved January l0, 2017, from
`https://www.merriarn-Webster.com/dictionary/circumstantial evidence. U.S. Steel’s complaint
`contains circumstantial evidence that transshipments occur, but no evidence from which one
`could reasonably infer that a specific transshipment occurred.
`
`12
`
`

`
`U.S. Steel argues that Rule 210.12(a)(3) does not mean what it says and may be satisfied
`
`by alleging that a respondent has placed the accused products “into commerce for, and leading
`
`to, importation.” U.S. Steel’s Opening Br. at 5 (quoting Certain Key Blanks for Keys ofHigh
`
`Sec. Cylinder Locks, lnv. No. 337-TA-308, Order No. 4, 1990 WL 710656, at *1 (Mar. 16,
`
`1990). The language quoted by U.S. Steel was argument by the complainant (it is unclear from
`
`the ALJ’s decision how much of this argument he adopted), see Key Blanks, 1990 WL 710656,
`
`at *3, and the Commission has not embraced a less restrictive alternative for pleading under
`
`section 337 than the one set forth in Rule 210. 12(a)(3).
`
`U.S. Steel points to complaint exhibits 50 at 14-10 and 51 at 9-10 contending that those
`
`exhibits show that one distributor respondent “had in the past shipped Chinese steel using _
`
`documentation showing Thailand as country of origin.” U.S. Steel’s Responsive Br. at 6-7.16
`
`But complaint exhibits 50 and 51 do not identify particular steel that was made inlChina and
`
`transshipped through another country to the United States. Exhibit 50 contains only general
`
`statements about the distributor respondents’ ability and willingness to transship steel, and a
`
`statement indicating a past practice of doing so. See Exhibit 50 (“Dear John” message dated
`
`4/11/2016) (“Please see attaching documents, these are previous Malaysian copies (Bill of
`
`lading, certificate or origin, certificate of marine insurance, Packing list, lnvoice) and Chinese
`
`MTC [z'.e., mill test certificate] we used to do.”) The documents referenced by the alleged
`
`distributor apparently were intended to convince the purported buyer in the United States that the
`
`distributor could generate fraudulent documents to deceive U.S. Customs, but these documents“
`
`do not describe any specific instance in which Chinese steel was transshipped to the U.S. from a
`
`third country. See Exhibit 50 (message to “Sun” dated 4/8/2016) (“I will be negotiating with my
`
`16'The pagination of these exhibits does not appear to match the references to page numbers in
`U.S._ Steel’s briefs.
`
`13
`
`

`
`customer about this. Would it be possible to get copies of what the Malaysian B/L and CO will
`
`look like for the shipment of steel? The appearance of the quality of the false documents will go
`
`a long way to convince my customer entrep6t [sic] trade method is worth the risk.”).
`
`.
`
`Unnumbered pages at the back of Exhibit 50 show a mill test certificate (MTC) for coiled steel
`
`manufactured in China, a bill of lading for candles shipping from Port Klang, Malaysia to Los
`Angeles, a certificate of origin from the Penang Malay Chamber of Commerce, Malaysia for
`
`“Natural Light Candle.Supply,” a Certificate of Marine Insurance for unspecified cargo, an
`
`invoice for “Natural Light Candle Supply,” and a packing list for the same.” These documents
`
`do not describe a specific instance of sale or importation into the United States of Chinese steel
`
`products under false designation of origin.
`
`‘Exhibit 51 shows the same type of correspondence between a putative buyer of
`
`transshipped steel and a distributor Respondent. Unnumbered pages at the back of Exhibit 51
`
`show a certificate of origin from the Putrajaya Malay Chamber of Commerce Malaysia for 16
`
`coils of pre-painted aluzinc steel coil shipping from Port Klang, Malaysia to Oakland, CA, a bill
`
`of lading dated February 2, 2016, for the same, and a quality certificate dated May 5, 2015, from
`
`a Chinese manufacturer for “Carbon structural hot-rolled coil.” These documents do not
`
`describe an actual importation. Pre-painted aluzinc steel and carbon ‘structural hot-rolled coil are
`
`not the same product. These documents do not identify a specific batch of steel that was
`
`17 Some of the entries in these documents are redacted, even in the confidential copies, but the
`information that is visible has been provided in this decision. The visible information does not
`appear to be subject to the protective order.
`
`14
`
`

`
`allegedly transshipped, even circumstantially. There is no evidence at all, whether direct or
`
`circumstantial, of a specific instance of unfair importation.”
`
`U.S. Steel’s complaint also cites the non-specific findings of a Congressional-
`
`investigation, the efforts of which were similar to the efforts documented in the complaint, into a
`
`wide variety of products made in China, including OCTG steel, without reference to any specific
`
`importation, U.S. Steel’s Opening Br. at 12 (citing Compl. Ex. 45 at 5 (“Foreign suppliers
`
`subject to AD/CVD orders and their U.S. importers avoid paying AD/CV duties by a number of
`
`unscrupulous schemes, including illegal transshipment and falsified country of origin markings .
`
`.
`
`.
`
`. In sum, they cheat”), and a declaration from a U.S. Steel executive similarly lacking any
`
`specificity, id. at 13 (citing Compl. Ex. 58 at 1} 9 (“[I]t is well-known that Chinese steel remains
`
`available in the United States. The Chinese steel industry has managed to circumvent
`
`antidumping and countervailing duty orders through transshipment and false labeling”). This
`
`circumstantial evidence is much too general to satisfy the Commission’s rule, which calls for a
`
`description of specific instances.”
`
`U.S. Steel contends that it would be too expensive for the company to import mismarked
`
`steel into the United States in order to demonstrate a specific inst