`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
`
`
`
`In the Matter of
`
`CERTAIN LITHIUM ION BATTERIES,
`BATTERY CELLS, BATTERY
`MODULES, BATTERY PACKS,
`COMPONENTS THEREOF, AND
`PROCESSES THEREFOR
`
`Investigation No. 337-TA-1159
`
`RESPONDENTS’ SK INNOVATION CO., LTD. AND SK BATTERY AMERICA, INC.’S
`MOTION FOR LEAVE TO FILE A REPLY TO COMPLAINANTS’ RESPONSE
`TO RESPONDENTS’ PETITION FOR COMMISSION REVIEW
`OF THE INITIAL DETERMINATION
`
`PUBLIC VERSION
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`PUBLIC VERSION
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`Respondents SK Innovation C0., Ltd., and SK Battery America, Inc. (collectively, “SKI”)
`
`hereby seek leave to file the attached Reply to Complainants LG Chem, Ltd., and LG Chem
`
`Michigan, Inc. (collectively, “LGC”) and Staff’s Responses to Respondents’ Petition for Review
`
`of the Initial Determination to address disregard of the relevant legal standards and Commission
`
`precedent, unsupported attorney arguments, and misstatements of the record.
`
`Good cause exists for SK’s motion. Fiist, neither the Commission nor the Federal Circuit
`
`has held that the Commission has inherent authority to issue a default sanction, yet the 1D relied
`
`inherent authority to reach this result. Instead of addressing this issue, LGC cites dicta from old
`
`cases that involve other Article I tribunals, ignoring that the bomlds of a body’s inherent authority
`
`are tribunal-specific. LGC also cites cases decided under the Commission Rules, not
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`the
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`Commission’s inherent authority. At best, whether the ALJ or Commission can issue sanctions
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`against a party outside of the Commission Rules remains an unsettled question.
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`Second, third-party evidence establishes that LGC cannot demonstrate substantial injury
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`or threat thereof, regardless of alleged spoliation. LGC ’s injury “theory”—
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`_ testimony demonstrating that LGC has not suffered, and is not threatened with, any
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`legally cognlzalle lull—y. specifically,—
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`—— SM,_
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`argues that it was entitled to and injured by SK obtaining these contracts, offering only attorney
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`argument and speculation contradicted by the record evidence.
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`PUBLIC VERSION
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`

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`Third, the LGC and Staff Oppositions confirm that the ID improperly relieved LGC of it
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`
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`burden of proving its alleged trade secrets are in fact trade secrets, regardless of any alleged SK
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`spoliation.
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`Fourth, both LGC and Staff doubled-down on the ID’s reliance on SK’s pre-complaint
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`activities to find spoliation of evidence, relying heavily on SK’s activities months, and even years,
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`before the complaint was filed. But LGC and Staff do not dispute that the April 2019 notice letter
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`was a mirror image of the 2017 notice letter or that it would have been easy for LGC to provide
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`SK clear notice of impending U.S. litigation.
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`Fifth, LGC and Staff oppositions wrongly attempt to justify the ID’s incorrect imposition
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`of default judgment based on the improper application of U.S. legal preservation rules on SK’s
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`pre-complaint activities, and misstatements of the record related to compliance with Order No. 13.
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`For these reasons, the Commission should grant Respondents’ Motion for leave to file the
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`attached Reply.
`
`Dated: March 17, 2020
`
`Respectfully submitted,
`/s/ Sturgis M. Sobin
`Sturgis M. Sobin
`Shara L. Aranoff
`Maureen F. Browne
`Alexander D. Chinoy
`Daniel E. Johnson
`Jessica C. Hill
`Augustus Golden
`Kristin M. Cobb
`Erin E. Biel
`Emily M. Mondry
`COVINGTON & BURLING LLP
`One CityCenter, 850 Tenth Street, N.W.
`Washington, DC 20001
`Telephone: +1 202-662-6000
`Matthew Phelps
`Amy Bond
`Jennifer Cieluch
`COVINGTON & BURLING LLP
`The New York Times Building
`
`3
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`PUBLIC VERSION
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`

`

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`
`
`
`620 Eighth Avenue
`New York, NY 10018-1405
`Telephone: +1 212-841-1000
`Robert T. Haslam
`COVINGTON & BURLING LLP
`3000 El Camino Real
`5 Palo Alto Square
`Palo Alto, CA 94306
`Telephone: +1 650-632-4700
`Michael K. Plimack
`Nitin Subhedar
`Stephanie M. Tennant
`COVINGTON & BURLING LLP
`Salesforce Tower
`415 Mission Street
`San Francisco, CA 94105-2533
`Telephone: +1 415-591-6000
`William H.Y. Park
`Scott A. Schrader
`Chang Sik (Charles) Kim
`Marian Sooyun Lee
`22nd Floor, Meritz Tower
`382, Gangnam-daero
`Gangnam-gu, Seoul
`Republic of Korea
`Telephone: +82-2-6281-0000
`Counsel for Respondents SK Innovation Co., Ltd. and
`SK Battery America, Inc.
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`4
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`PUBLIC VERSION
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`

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`PUBLIC VERSION
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`
`
`
`ATTACHMENT
`
`ATTACHMENT
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`PUBLIC VERSION
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`

`

`
`UNITED STATES INTERNATIONAL TRADE COMMISSION
`WASHINGTON, D.C.
`
`
`
`In the Matter of
`
`CERTAIN LITHIUM ION BATTERIES,
`BATTERY CELLS, BATTERY
`MODULES, BATTERY PACKS,
`COMPONENTS THEREOF, AND
`PROCESSES THEREFOR
`
`Investigation No. 337-TA-1159
`
`RESPONDENTS’ SK INNOVATION CO., LTD. AND SK BATTERY AMERICA, INC.’S
`REPLY IN SUPPORT OF THEIR PETITION FOR COMMISSION REVIEW OF
`ORDER NO. 34
`
`PUBLIC VERSION
`
`

`

`
`
`
`
`TABLE OF CONTENTS
`
`I.
`
`II.
`
`III.
`
`IV.
`
`NEITHER THE COMMISSION NOR THE FEDERAL CIRCUIT HAS HELD
`THAT THE COMMISSION HAS INHERENT AUTHORITY TO ISSUE A
`DEFAULT SANCTION ..................................................................................................... 1
`
`LGC AND STAFF DISREGARD THIRD PARTY EVIDENCE
`ESTABLISHING THAT LGC CANNOT DEMONSTRATE INJURY, FOR
`REASONS UNAFFECTED BY ANY ALLEGED SPOLIATION ................................... 5
`
`A.
`
`B.
`
`C.
`
`LGC’s Unsupported Arguments Regarding the VW and Ford “Lost Sales”
`Misstate the Record Evidence on Injury ................................................................. 6
`
`LGC Mischaracterizes the Legal Requirement for Demonstrating
`Substantial Injury or Threat Thereof in a Section 337 Investigation ...................... 8
`
`A Remedy Is Not Appropriate Because SK Will Manufacture EV Batteries
`in the U.S. ............................................................................................................. 11
`
`THE LGC AND STAFF RESPONSES CONFIRM THE ID IMPROPERLY
`RELIEVED LGC OF ITS BURDEN OF PROVING THE ATS ARE TRADE
`SECRETS ......................................................................................................................... 12
`
`THE ID ERRED BY RELYING ON SK’S PRE-COMPLAINT ACTIVITIES TO
`FIND SPOLIATION OF EVIDENCE.............................................................................. 16
`
`A.
`
`B.
`
`C.
`
`SK Did Not Have a Duty to Preserve Evidence Before the Filing of LGC's
`Complaint .............................................................................................................. 16
`
`The ID Erred in Finding Bad Faith Based on Conduct that Occurred
`Before SK Had a Duty to Preserve Evidence ....................................................... 19
`
`SK’s Post-Complaint Conduct Does Not Support a Determination of
`Spoliation .............................................................................................................. 21
`
`V.
`
`SK’S COMPLIANCE WITH ORDER 13 WAS REASONABLE AND DOES
`NOT WARRANT THE SEVERE SANCTION OF A DEFAULT .................................. 24
`
`A.
`
`B.
`
`C.
`
`The ID Did Not Hold that Order 13 Conduct Warranted Default
`Independent of Spoliation ..................................................................................... 24
`
`In Light of the Severe Time Limits and Expansive Scope, SK’s Initial
`Efforts Were Both Practical and Reasonable ........................................................ 25
`
`The Challenges Facing SK in Complying with Order 13 Were Brought to
`the ALJ’s Attention with Adequate Time to Have Resolved Them Without
`Prejudice to LGC .................................................................................................. 29
`
`i
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`PUBLIC VERSION
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`

`

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`CONCLUSION ................................................................................................................. 32
`
`
`
`VI.
`
`ii
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`PUBLIC VERSION
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`

`

`
`
`
`
`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Benedict v. Super Bakery, Inc.,
`665 F.3d 1263 (Fed. Cir. 2011)..................................................................................................3
`
`Cate Jenkins v. EPA,
`ARB No. 15-046, ALJ No. 2011-CAA-003, 2018 WL 2927663 (Dep’t of
`Labor Mar. 1, 2018) ...................................................................................................................3
`
`Certain Cold Cathode Fluorescent Lamp (Ccfl) Inverter Circuits & Prods.
`Containing the Same,
`Inv. No. 337-TA-666, Initial Determination, 2011 WL 6211182 (Oct. 2011) ..........................2
`
`Certain Drill Point Screws for Drywall Construction,
`Inv. No. 337-TA-116, Comm’n Op., 0083 WL 851489 (Mar. 3, 1983) ....................................9
`
`Certain Dynamic Random Access Memories,
`Inv. No. 337-TA-242, Comm’n Op. (Nov. 1987) ....................................................................10
`
`Certain Optical Waveguide Fibers,
`Inv. No. 337-TA-189, Initial Determination, 1985 WL 303606 (Jan. 22, 1985) ..............10, 11
`
`Certain Opaque Polymers,
`Inv. No. 337-TA-883, Initial Determination, 2014 WL 5768586 (Oct. 20,
`2014) ....................................................................................................................................4, 16
`
`Certain Point of Sale Terminals & Components Thereof,
`Inv. No. 337-TA-524, Comm’n Op. (Aug. 23, 2006) ................................................................2
`
`Certain Stainless Steel Prod., Certain Processes for Mfg. or Relating to Same, &
`Certain Prods. Containing Same,
`Inv. No. 337-TA-933, Comm’n Op., 2016 WL 8809133 (June 9, 2016) ..................................4
`
`Certain Vaginal Ring Birth Control Devices,
`Inv. No. 337-TA-768, Order No. 28, 2012 WL 37160 (Jan. 3, 2012) .......................................2
`
`Corning Glass Works,
`799 F.2d 1559 (Fed. Cir. 1986)..................................................................................................9
`
`CVD, Inc. v. Raytheon Co.,
`769 F.2d 842 (1st Cir. 1985) ....................................................................................................14
`
`iii
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`PUBLIC VERSION
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`

`

`
`
`
`
`Diamond Power Int’l, Inc. v. Davidson,
`540 F. Supp. 2d 1322 (N.D. Ga. 2007) ....................................................................................14
`
`Estate of Spear v. Comm’r,
`41 F.3d 103 (3d Cir. 1994).........................................................................................................5
`
`GN Netcom, Inc. v. Plantronics, Inc.,
`No. CV 12-1318-LPS, 2016 WL 3792833 (D. Del. July 12, 2016) ..........................................5
`
`In re John Richards Homes Bldg. Co.,
`552 F. App’x 401 (6th Cir. 2013) ..............................................................................................3
`
`Lab. Corp. of Am. v. United States
`289 U.S. 553 (1933) ...................................................................................................................3
`
`Micron Tech., Inc. v. Rambus Inc.,
`645 F.3d 1311 (2011) ....................................................................................................... passim
`
`Organik Kimya, San Ve Tic. A.S. v. Int’l Trade Comm’n,
`848 F.3d 994 (Fed. Cir. 2017)................................................................................................2, 4
`
`Ruckleshaus v. Monsanto,
`467 U.S. 986 (1984) .................................................................................................................13
`
`S. Field Maint. & Fabrication LLC v. Killough,
`No. 2:18-CV-581-GMB, 2019 WL 360515 (N.D. Ala. Jan. 29, 2019) ...................................14
`
`In re Sanchez,
`941 F.3d 625 (2d Cir. 2019).......................................................................................................3
`
`Synthex Opthalmics, Inc. v. Novicky,
`No. 80 C 6257, 1982 WL 63797 (N.D. Ill. May 6, 1982) ......................................................14
`
`Textron v. Int’l Trade Comm’n,
`753 F.2d 1019 (Fed. Cir. 1985)..................................................................................................9
`
`In re Walker,
`532 F.3d 1304 (11th Cir. 2008) .................................................................................................3
`
`Williams v. United States,
`289 U.S. 553 (1933) ...................................................................................................................3
`
`Yellowfin Yachts, Inc. v. Barker Boatworks, LLC,
`898 F.3d 1279 (11th Cir. 2018) ...............................................................................................14
`
`iv
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`PUBLIC VERSION
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`

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`Other
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`Jan. 19, 2019, https://www.georgia.org/newsroom/press-releases/sk-innovation-
`make-donation-education-jackson-county ...............................................................................11
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`
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`
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`v
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`PUBLIC VERSION
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`

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`PUBLIC VERSION
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`TABLE OF ABBREVIATIONS
`
`ALJ
`
`ATS
`Commission
`
`Administrative Law Judge
`
`Alleged Trade Secret(s)
`International Trade Commission
`
`Complainants LG Chem, Ltd. and LG Chem Michigan Inc.’s Motion
`for Default Judgment, Contempt, and Sanctions (Mot. Dkt. No. 1159-
`013) (EDIS Doc. ID 693365)
`
`Complainants’ Pre-Hearing Brief (EDIS Doc. ID 701244)
`
`Complainants LG Chem, Ltd. and LG Chem Michigan Inc.’s Motion
`for Leave to File a Reply in Support of Motion for Default Judgment,
`Contempt, and Sanctions (EDIS Doc. ID 695643)
`
`Complainants LG Chem, Ltd. and LG Chem Michigan Inc.’s
`Supplemental Brief in Support of Motion for Default Judgment,
`Contempt, and Sanctions (EDIS Doc. ID 696618)
`Electric vehicle
`
`Ford Motor Company
`Final Trade Secret Disclosure
`
`Order No. 34, Initial Determination Granting Complainants LG Chem
`Ltd. and LG Chem Michigan Inc.’s Motion For Default Judgment,
`Contempt, and Sanctions
`International Trade Commission
`
`CMD
`
`CPHB
`
`CPR
`
`CSR
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`EV
`
`Ford
`FTSD
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`ID
`
`ITC
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`ITSD
`
`LGC
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`LGCMI
`
`MEB NAR
`
`MSD
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`MTC
`
`MTSC
`
`
`
`Initial Trade Secret Disclosure
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`LG Chem, Ltd., LG Chem Michigan, Inc.
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`LG Chem Michigan, Inc.
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`MEB North America Region
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`Respondents’ Motion for Summary Determination of No Violation of
`Section 337 Based on the Absence of Existing or Threatened
`Substantial Injury Attributable to Unfair Imports (Mot. Dkt. No. 1159-
`027) (EDIS Doc. ID 697506)
`
`Respondents’ Motion to Compel Complainants to Narrow and State
`Its Trade Secrets with Particularity or, Alternatively, to Strike Its
`Asserted Trade Secrets OVIot. Dkt. No. 1159-005) (EDIS Doc. ID
`687972)
`
`Complainants LG Chem, LTD. and LG Chem Michigan Inc.’s Motion
`for an Order to Show Cause Why Respondents Should Not be Held in
`Contempt for Violating Order No. 13 and Motion for Shortened
`Response Time (Mot. Dkt. No. 1159-010) (EDIS Doc. ID 691830)
`
`OEM
`
`Original equipment manufacturer
`
`Order 13
`
`Order No. 13 (EDIS Doc. ID 691196)
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`
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`PUBLIC VERSION
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`PUBLIC VERSION
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`Pfll
`
`PER Opp.
`
`PR Opp. Summ.
`
`PR Staff Resp.
`
`ROMC
`
`RMTS
`
`RPHB
`
`RPHS
`
`RRD
`
`RSR
`
`SK
`
`SKBA
`
`SKI
`
`SOP
`
`VW
`
`
`
`Respondents’ SK Innovation C0., Ltd. and SK Battery America, Inc.’s
`Petition for Commission Review of Order No. 34 (EDIS Doc. ID
`704348)
`
`Complainants’ Opposition to Respondents’ Petition for Commission
`Review of Order No. 34 (EDIS Doc. ID 704721)
`
`Summary of Complainants’ Opposition to Respondents’ Petition for
`Commission Review of Order No. 34 (EDIS Doc. ID 704707)
`
`Response of the Office ofUnfair Import Investigations to Respondents
`SK Innovation Co., Ltd. and SK Battery America, Inc.’s Petition for
`Review of Initial Determination (Order No. 34) OEDIS Doc. ID
`704685)
`
`Respondents’ Opposition to Complainants’ LG Chem, Ltd. and LG
`Chem Michigan Inc.’s Motion to Compel Discovery (EDIS Doc. ID
`689925)
`
`Respondents’ Renewed Motion to Strike Complainants’ Asserted
`Trade Secrets (Mot. Dkt. No. 1159-026) (EDIS Doc. ID 697491)
`
`Respondents’ Pre-Hearing Brief (EDIS Doc. ID 701249)
`
`Respondents’ Pre—Hearing Statement (EDIS Doc. ID 701209)
`
`Respondents’ Response to Complainants’ Motion for Default
`Judgment, Contempt, and Sanctions (EDIS Doc. ID 695146)
`
`Respondents’ Supplemental Brief re LGC ’5 Motion for Default
`Judgment, Contempt, and Sanctions (EDIS Doc. ID 697213)
`
`SK Innovation Co., Ltd., SK Battery America, Inc.
`
`SK Battery America, Inc.
`
`SK Innovation Co., Ltd.
`
`Start of production
`
`Volkswagen Group of America, Inc.
`
`
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`vii
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`PUBLIC VERSION
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`

`
`The opposition briefs submitted by LGC and the Staff follow the same pattern of errors
`
`
`
`that plagued the motion practice leading up to the ID and ultimately infected the ID itself. Time
`
`after time, LGC and the Staff fail to apply the relevant law to the factual record with the rigor this
`
`matter deserves. Among other failings, the opposition briefs impermissibly conflate and confuse
`
`the relevant sources of authority on which a default may be imposed. The legal standard for the
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`critical issue of injury is wrongly confused with those for use and importation. The document
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`deletion that took place before SK had notice of impending U.S. litigation is wrongly treated under
`
`U.S. evidence preservation rules. And throughout, the opposition briefs, much like the ID,
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`repeatedly disregard actual evidence untainted by document destruction in favor of attorney
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`argument and speculation.
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`This unmistakably results-oriented approach taken in the LGC and Staff opposition briefs
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`should be rejected, and the ID should be reviewed. The need for careful review and a full
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`evidentiary record is particularly important here given that this is an extremely high-stakes matter
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`that threatens to put at risk thousands of U.S. jobs as well as the clean energy goals of our country.
`
`As explained below, the opposition briefs fail to rebut SK’s showing that the record in this
`
`investigation does not justify the severe sanction imposed by the ID. SK’s petition should therefore
`
`be granted.
`
`I.
`
`NEITHER THE COMMISSION NOR THE FEDERAL CIRCUIT HAS HELD
`THAT THE COMMISSION HAS INHERENT AUTHORITY TO ISSUE A
`DEFAULT SANCTION
`
`The ID found two separate sources of authority relevant to entry of default: Rule 210.33,
`
`which permits sanctions for violation of an order, and inherent authority, which the ID found
`
`applicable to the “particular type of spoliation which occurred in this investigation.” ID at 129.
`
`Although SK has demonstrated that the imposition of a default was in error regardless of the
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`1
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`PUBLIC VERSION
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`

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`authority, the ID’s recognition that spoliation can be addressed only under inherent authority raises
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`
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`an issue that the ID skirted. Specifically, the ID fails to explain the basis upon which the
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`Commission, as an Article I tribunal, may rely on inherent authority to go so far as to impose a
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`default sanction. As the Staff noted in its response, and as the Commission acknowledged in
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`Organik Kimya, “[i]t is an unanswered question whether or not the Commission and the ALJ would
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`have a similar inherent authority [to a district court] for assuring the fairness of the proceedings
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`before it.” PfR Staff Resp. at 12 n.3; see also 848 F.3d at 1002. Notably, no ALJ has ever issued
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`default sanctions under his or her inherent authority, and the Commission has not determined
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`whether ALJs’ inherent powers extend that far. If the Commission lacks inherent authority for
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`issuance of a default remedy, then the only acts addressable here are those associated with Order
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`13. And, as noted in Section V below, the record clearly does not support this extreme sanction
`
`based on Order 13 actions alone.
`
`
`
`The inherent authority of quasi-judicial administrative agencies is not co-extensive with
`
`that of district courts, and it varies according to the particular tribunal and the specific power at
`
`issue. Certain Point of Sale Terminals & Components Thereof, Inv. No. 337-TA-524, Comm’n
`
`Op., at 13 (Aug. 23, 2006) (finding authority cited by respondents inapplicable, as it “does not
`
`address the inherent authority, if any, of administrative agencies”); Certain Cold Cathode
`
`Fluorescent Lamp (Ccfl) Inverter Circuits & Prods. Containing the Same, Inv. No. 337-TA-666,
`
`Initial Determination, 2011 WL 6211182, at *105 (Oct. 2011) (“[T]he International Trade
`
`Commission is not a trial court, and the Administrative Law Judge does not share the same inherent
`
`contempt powers.”); see also Certain Vaginal Ring Birth Control Devices, Inv. No. 337-TA-768,
`
`Order No. 28, 2012 WL 37160, at *9 (Jan. 3, 2012) (“‘[T]he inherent power to control the
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`proceedings’ is not a ground upon which a party may move for sanctions.”).
`
`2
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`PUBLIC VERSION
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`

`

`
`Displaying substantially less candor than the Commission Staff, LGC ignores Commission
`
`
`
`precedent on point, cites “dicta from old cases” involving other Article I tribunals, and ignores that
`
`the bounds of a body’s inherent authority are tribunal-specific.1 None of the cases cited by LGC
`
`involved a tribunal’s inherent power to issue default sanctions. LGC mischaracterizes Benedict v.
`
`Super Bakery, Inc., which does not speak to the inherent powers of an agency tribunal at all, but
`
`instead finds that the agency in issue can “assure diligent administration of the rights within its
`
`charge” by issuing sanctions under its rules. 665 F.3d 1263, 1268 (Fed. Cir. 2011). In that case,
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`the question was whether the Trademark Trial and Appeal Board properly applied its rule
`
`permitting default sanction for violation of a Board order. To the extent that the decision makes
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`any reference to inherent authority, it is simply to note that administrative tribunals, like district
`
`courts, should be guided to exercise restraint, including considering lesser sanctions before
`
`invoking their rules-based authority to issue “the extreme sanction of default judgment.” Id.
`
`
`1 For example, In re Walker, 532 F.3d 1304, 1309 (11th Cir. 2008) addresses whether bankruptcy
`courts have inherent authority to issue monetary sanctions against an attorney. Such a holding
`relies on the broad statutory mandate given bankruptcy courts as well as their unique position as
`units of Article III district courts, rather than administrative agencies. Furthermore, even these
`courts have limits on their power to sanction, reinforcing SK’s position that ALJs doubtlessly have
`inherent powers, but the precise bounds of those powers continue to be delineated. See In re
`Sanchez, 941 F.3d 625, 628 (2d Cir. 2019) (recognizing, for the first time, that bankruptcy courts
`can “impose relatively minor non-compensatory sanctions on attorneys” but maintaining they do
`not have the power to impose more substantial punitive sanctions); see also In re John Richards
`Homes Bldg. Co., 552 F. App’x 401, 414 (6th Cir. 2013) (“That bankruptcy courts have both
`statutory and inherent punitive sanction powers does not, however, mean they are without limits.
`Those powers are circumscribed and have most often been limited to compensatory punitive
`awards of attorney’s fees[.]”). Similarly, Lab. Corp. of Am. v. United States establishes that the
`Court of Federal Claims, another statutory creation that has been uniquely elevated, see Williams
`v. United States, 289 U.S. 553, 565 (1933), has inherent authority to issue evidentiary sanctions.
`108 Fed. Cl. 549, 558 (2012); see also Cate Jenkins v. EPA, ARB No. 15-046, ALJ No. 2011-
`CAA-003, 2018 WL 2927663, at *11 (Dep’t of Labor Mar. 1, 2018) (Dep’t of Labor ALJ can issue
`adverse inferences as sanctions).
`
`
`3
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`PUBLIC VERSION
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`

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`LGC and the Staff also rely on Stainless Steel and Opaque Polymers, but their reliance on
`
`
`
`
`
`these cases is plainly wrong, as they are not based on inherent authority but on Commission Rule
`
`210.33. Certain Stainless Steel Prod., Certain Processes for Mfg. or Relating to Same, & Certain
`
`Prods. Containing Same, Inv. No. 337-TA-933, Comm’n Op., 2016 WL 8809133, at *8 (June 9,
`
`2016); Organik Kimya, San Ve Tic. A.S. v. Int’l Trade Comm’n, 848 F.3d 994, 1002 (Fed. Cir.
`
`2017). Further, neither of these cases relies on Micron, as LGC asserts; instead, the Federal Circuit
`
`and the Commission found that Micron is inapposite because it involved sanctions issued under a
`
`district court’s inherent authority. Organic Kimya, 838 F.3d at 1001; Stainless Steel, Comm’n Op.,
`
`2016 WL 8809133, at *11. Organik Kimya, like Staff, notes that whether the ALJ or Commission
`
`can issue sanctions against a party outside of the Commission Rules remains an unsettled question.
`
`848 F.3d at 1002 (the ALJ did not use “his inherent authority—to the extent he has such
`
`authority—to sanction Organik Kimya”); see also Certain Opaque Polymers, Inv. No. 337-TA-
`
`883, Initial Determination, 2014 WL 5768586, at *4 n.2 (Oct. 20, 2014) (“Article III Courts also
`
`possess the inherent power to sanction for spoliation of evidence. It is unclear whether an ALJ at
`
`the ITC has analogous authority[.]”).
`
`LGC wrongly asserts that SK “conceded” the applicability of inherent authority in its
`
`original opposition to LGC’s motion for default. PfR Opp. at 8 n.4. That assertion is baseless.
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`SK’s brief expressly pointed out that Stainless Steel and Opaque Polymers reached the default
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`finding based on rule 210.33 and clearly rejected reliance on inherent authority, and that the alleged
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`spoliation here was not in violation of an order. RRD at 61–62 (“Those cases explicitly state that
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`they pertain only to the imposition of sanctions under Commission Rule 210.33 for violation of a
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`discovery order; they did not address spoliation allegations, such as those asserted here with
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`respect to the April conduct, unmoored from a discovery order.”) 2
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`Finally, both LGC and the Staff rely heavily on the burden shifting holding of Micron
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`Tech., Inc. v. Rambus Inc., 645 F.3d 1311, 1328 (2011), in an attempt to dismiss large sections of
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`SK’s Petition identifying issues that alleged spoliation could not have impacted. But even
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`assuming that the Micron standard applied notwithstanding the above uncertainties, and that there
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`was a showing of bad faith, it is critical to note that this burden is not insurmountable—and that a
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`finding of bad faith does not end the inquiry or permit conclusory and sweeping application of the
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`“might have been” standard. Instead, the court must still consider whether the non-moving party
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`can dispute the moving party’s “suggestion” of “might have been” relevance. Micron, 645 F.3d at
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`1328. Ultimately, the non-moving party can overcome the presumption of relevance by showing
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`the deleted documents cannot “plausibly be thought likely to affect the outcome of the trial.” Id.
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`at *11 GN Netcom, Inc. v. Plantronics, Inc., No. CV 12-1318-LPS, 2016 WL 3792833, at *9–11
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`(D. Del. July 12, 2016) (quoting Estate of Spear v. Comm’r, 41 F.3d 103, 115 (3d Cir. 1994)).
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`II. LGC AND STAFF DISREGARD THIRD PARTY EVIDENCE ESTABLISHING
`THAT LGC CANNOT DEMONSTRATE INJURY, FOR REASONS
`UNAFFECTED BY ANY ALLEGED SPOLIATION
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`In response to the extensive evidence unconnected with alleged spoliation demonstrating
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`that LGC has not experienced, and is not threatened with, substantial injury, LGC offers a response
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`that is marked by unsupported attorney argument, misstatement of the record, and disregard for
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`the relevant legal standards. Most tellingly, LGC’s injury “theory”—
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`2 To the extent that the arguments below are directed to whether the ID meets certain legal
`standards for default as they relate to spoliation, they are made without waiver of the predicate
`position that there is no precedent supporting Commission reliance on inherent authority.
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`statement that there is a “lack of any evidence in the record”
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` Cf. PfR Opp. at 40.
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`. See PfR,
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`Ex. 10 (LGC Report) at Slide 1; Ex. 22, (VW Final Offer Evaluation Spreadsheet) at
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`unrefuted record confirms that
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` The
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`127; PfR, Ex. 8 (VW Presentation) at -.953174-.177, -.180, -.185; see also RRD, Ex. 83 (VW
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`. See, e.g., PfR, Ex. 7 (VW Presentation) at -125, -
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`Nomination Agreement) at -992371, -992373.
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`With regard to Ford, LGC likewise offers nothing more than unsupported assertions that it
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`would have won the business but for SK’s bid. See PfR Opp. at 39-40.6 Aside from confirming
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`that
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`” LGC cannot dispute
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`LGC’s further claim that
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`6 It is also unclear which briefs or evidence LGC is referring to on page 39 of its Opposition, where
`it cites “See id. (collecting evidence)” and “Id.” In any event, LGC’s arguments go to “use” of the
`alleged trade secrets, do not demonstrate actual substantial injury or threat thereof, and concern
`arguments that LGC never even made in its sanctions briefings on injury, such that there was
`nothing for SK to “dispute.” PfR Opp. at 39. Moreover, LGC’s suggestion that SKI “was afforded
`ample briefing on its arguments” in the context of injury and other issues in the Investigation is
`incorrect and misleading. Cf. PfR Opp. at 33 n.6. Upon issuance of the ID, the ALJ deemed all
`other pending motions moot and never issued a decision on the merits of these critical disputed
`issues on which SK had moved. SK directly addressed—and did not “ignore”—LGC’s deficient
`attempts to demonstrate a nexus between importation and injury, as clearly set forth in SK’s MSD
`briefings. See MSD and MSD Reply (focusing almost exclusively on the lack of nexus between
`importation and injury); cf. PfR Opp. at 41.
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`Ex. 24 (Ford Dep. Tr.) at 52:23–53:2, 53:21–54:14, 115:14–116:18. LGC’s “inference” that Ford
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`“more likely than not” would have selected LGC but for SK—
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`—completely disregards the fact that
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`. RRD, Ex. 46 at 249:12–250:22; cf. PfR Opp. at 40.
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`The ID’s failure to engage with the foregoing record on injury, for which any alleged
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`spoliation has no relevance, and nonetheless enter a default judgment was clear error.
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`B.
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`LGC Mischaracterizes the Legal Requirement for Demonstrating
`Substantial Injury or Threat Thereof in a Section 337 Investigation
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`LGC contends that SK “urges the Commission to erroneously shift the evidentiary burden
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`to LGC [by] claiming that unless LGC can demonstrate the evidence that survived SKI’s spoliation
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`is sufficient to satisfy LGC’s burden on the merits for each issue, then sanctions cannot be
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`imposed.” PfR Opp. at 32. LGC posits that the “proper question” instead is whether certain
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`allegedly deleted documents “might have been relevant” to a particular claim or defense. Id.
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`However, as set forth in SK’s Petition, LGC failed to address this question in the context of injury.
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`The few produced documents and the small number of file names of allegedly deleted documents
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`to which the ID cited, and to which LGC refers, are not probative of injury but rather are relevant,
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`at most, to misappropriation or use.7 PfR at 42–44. Indeed, LGC agrees that the documents it
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`7 For the first time, LGC argues in its Opposition that document CSR, Ex. 120 is relevant to injury.
`This is unavailing. First, the ID did not evaluate or identify this document as even potentially
`relevant to injury. Second, CSR, Ex. 120 was a produced document, not one “targeted for
`deletion,” and concerned discrete edits to a particular presentation, not a widespread instruction to
`delete documents as LGC claims. Cf. PfR opp. at 36; CSR at 2. To the extent Ex. 120 is relevant
`at all, it would be to “use” of alleged trade secrets, not the separate and distinct requirement of
`injury. LGC also cites to the file names of other allegedly deleted documents for the proposition
`that “SKI appears to have deleted” certain documents related to VW and Ford. PfR Opp. at 34.
`The ID did not rely on these documents with respect to injury, and LGC’s belated attempt to use
`them to support the ID should be rejected.
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`C.
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`A Remedy Is Not Appropriate Because SK Will Manufacture EV Batteries in
`the U.S.
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`LGC filed its Complaint in an attempt to stop SK’s future domestic production of EV
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`batteries in Georgia, where SK’s investment in a new facility is one of the largest single
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`investments and job creating initiatives in the state’s history. See Georgia PI Comments (Statement
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`from Governor Kemp, EDIS Doc. ID. 675729); see also “SK Innovation to Make Donation to
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`Education in Jackson County,” Jan.
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`19, 2019, https://www.georgia.org/newsroom/press—
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`releases/sk—irmovation—make-donation—education—jackson—c01mty. But competition in the U.S.
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`market from another domestic producer cannot serve as the basis for cognizable injury or threat
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`thereof in the ITC. See Certain Optical