NEW YORK, NY
`LOS ANGELES, CA
`CHICAGO,
`IL
`STAMFORD, CT
`PARSIPPANY, NJ
`
`AFFILIATE OFFICES
`MUMBAI,
`INOIA
`
`KELLEY DRYE & WARREN rr-p
`
`A LIMIÎED IIAEIIITY PARTNERSHIP
`
`WASHINGTON HARBOUR, SUITE 4OO
`3050 K STREET, NW
`wASHtNGTON, D.C. 20007-5108
`
`(202') 342-84O0
`
`FACSIMILE
`(202) 342-8451
`www, k€lleydrye.com
`
`February 18,2016
`
`USITC Investigation No. 337-TA-933
`PUBLIC DOCUMENT
`
`The Honorable Lisa R. Barton
`Secretary
`U,S. International Trade Commission
`500 E Street, S.W., Room 112
`Washington, DC 20436
`Re: Certain Stainless Steel Products. Certain Processes for Manufacturing or
`Relating to Same" and Certain Products Containing Same
`
`Dear Secretary Barton:
`
`On behalf of Central Wire Inc., Sumiden Wire Products Corporation, Tree Island Steel,
`
`and Tri Star Metals ,LLC domestic producers of stainless steel wirel (collectively, the "stainless
`
`Wire Producers") we are writing in connection with the U.S. International Trade Commission's
`
`review of the Initial Determination of a default judgement issued against Viraj Profiles Limited
`
`("Viraj") in the above-referenced investigation. Specifically, the Stainless Wire Producers wish
`
`to address the public interest factors associated with the imposition of a remedy. As U.S. producers
`
`of merchandise subject to this investigation, our primary interest is to ensure that the trade laws of
`
`the United States are properly enforced, particularly where those laws protect the assets and
`
`intellectual property of our U.S.-based manufacturing facilities and employees. The current
`
`I Central Wire Inc., Sumiden Wire Products Corporation, Tree Island Steel, and Tri Star Metals,
`LLC account for the majority of U.S. production of stainless steel wire.
`
`

`
`The Honorable Lisa R. Barton
`February 18,2016
`Page2
`
`PUBLIC DOCUMENT
`
`investigation has given rise to an unprecedented need to ensure that the integrity of those laws is
`
`maintained.
`
`In September 2014, Valbruna Slater Stainless, Inc. ("VSSI"), Valbruna Stainless Inc.
`
`("VSI"), and Acciaierie Valbruna S.p.A. filed a complaint with the ITC under section 337 of the
`
`Tariff Act of 1930, as amended, alleging that the Viraj, as well as several customers, unlawfully
`
`imported certain stainless steel products manufactured using Valbruna's stolen trade secrets,
`
`including both know-how and customer lists. The trade secrets came into the possession of Viraj
`
`based on an inducement provided to a former Valbruna employee by Viraj. The theft of the trade
`
`secrets had already resulted in a criminal conviction in Italy. Valbruna asked the Commission to
`
`issue a limited exclusion order barring the importation of stainless products manufactured by Viraj
`
`that benefited from the stolen trade secrets, as well as a cease and desist order that would bar the
`
`sale of such products already in the United States.
`
`In his initial determination, the Administrative Law Judge found that Viraj had engaged in
`
`"spoliation of evidence" relevant to the proceeding. Specifically, the ALJ found that: (1) Viraj
`
`had a duty to preserve the destroyed and missing evidence; (2) Viraj destroyed or withheld that
`
`evidence with a culpable state of mind and in bad faith; and (3) the destroyed or withheld
`
`information is relevant and its loss is prejudicial to Valbruna. In sum, the ALJ found that Viraj's
`
`conduct in the investigation was in bad faith and was so egregious as to warrant the sanction of a
`
`default judgment, a judgment which amounted to an affirmative determination that Viraj had
`
`misappropriated Valbruna's trade secrets. The Commission has properly affrrmed that default
`
`judgment.
`
`

`
`The Honorable Lisa R. Barton
`February 18,2016
`Page 3
`
`PUBLIC DOCUMENT
`
`The issue of how to fashion a remedy is now before the Commission. Viraj is one of the
`
`largest Indian producers of stainless steel products. It has captured market share in the U.S. to the
`
`detriment of Valbruna and it has accomplished that through the misappropriation of Valbruna's
`
`trade secrets. The trade secrets go to the essence of Valbruna's melt processes, and thus the
`
`misappropriation of those trade secrets has benefited virtually every product Viraj has exported to
`
`the United States, including stainless steel wire.
`
`Viraj is the second largest Indian exporter of stainless steel wire to the United States. Based
`
`on Datamyne, Viraj accounted for a substantial share of U.S. imports of stainless steel wire from
`
`India during the past two years. See Attachment 1. Moreover, the absolute volume of imports of
`
`stainless steel wire from India has been significant in recent years. Indeed, India was the largest
`
`source of stainless steel wire imports into the U.S. market from 2013 to 2015, See Attachment2.
`
`U.S. imports of stainless steel wire have also surged into the U.S. market in recent years. U.S.
`
`imports from India increased significantly from 11,549 tons in 2013 to 14,463 tons in 2015,
`
`representing an increase of 25.2 percent during the three-year period. Id.
`
`The increase in imports coincided with aggressive pricing practices that were consistently
`
`lower than imports from other countries. As reflected in U.S. import average unit values
`
`("AUVs"), U.S. prices of imports of stainless steel wire from India declined from $3,178 per ton
`
`in 2013 to $2,589 per ton in 2015. Id. The AUVs of imports from India were 30 percent lower
`
`than the AUVs of total imports in 2015. Id. In fact, India demonstrated the lowest AUVs of any
`
`of the top eight countries that exported stainless steel wire to the United States from 2013 to 2015.
`
`rd.
`
`

`
`The Honorable Lisa R. Barton
`February 18,2016
`Page 4
`
`PUBLIC DOCUMENT
`
`Section 337 permits the Commission to impose a limited exclusion order against Viraj's
`
`imports into the United States. The Commission is required to take into account the public interest
`
`in fashioning that remedy. In our view, nothing is more consistent with the public interest than
`
`the exclusion of imports from a producer that has no regard for the laws or the procedures
`
`associated with those laws.
`
`A limited exclusion order would not have a negative effect on the public health and welfare,
`
`competitive conditions in the U.S. economy, U.S. production, and/or U.S. consumers. The
`
`Stainless Wire Producers have suffrcient excess capacity to supply customer requirements for
`
`stainless steel wire if Viraj were to be excluded from the U.S. market. Total imports from India
`
`were2I,64l tons in 2015. The Stainless Wire Producers have idle capacity significantly in excess
`
`of that volume of imports. Thus, U.S. producers have sufficiency capacity to supply U.S.
`
`consumers currently sourcing stainless steel from India without any disruptions to U.S. supply.
`
`V/ith the Stainless Wire Producers offering the same stainless steel wire products and shipping
`
`through the same channels of distribution as Viraj in the U.S. market, the Stainless Wire Producers
`
`could easily supply all segments of the U.S. market ifViraj were to be subject to a limited exclusion
`
`order. Furthermore, there are multiple countries that export stainless steel wire to the United States
`
`that could also supply the U.S. market without disruption. Thus, U.S. consumers would not
`
`experience any supply disruptions or harm if Viraj were to be excluded from the market.
`
`Stainless steel wire is an intermediate product used to make a multitude of wire products,
`
`including, fasteners, springs, wire mesh, strand, wire rope, welding wire, and medical instruments.
`
`Stainless steel wire is used in a number of significant applications in the automotive, construction,
`
`chemical, dairy, food, pharmaceutical, and consumer industries, and thus is an important industry
`
`

`
`The Honorable Lisa R. Barton
`February 18,2016
`Page 5
`
`PUBLIC DOCUMENT
`
`to the U.S. economy. A strong, healtþ domestic industry producing stainless steel wire is vital to
`
`the public health and welfare of the U.S. economy.
`
`For the reasons stated in these petitions, the Stainless Wire Producers request that the
`
`Commission take these factors into account as it evaluates the scope of its remedy, and specifically,
`
`the broad application of that remedy to all of the products sold by Viraj in the U.S. that were found
`
`to have benefited from the misappropriation of Valbruna's trade secrets.
`
`Respectfully submitted,
`
`KATHLEEN W. CANNON
`
`Counsel to Central [4/ire Inc., Sumiden Wire
`Products Corporation, Tree Island Steel, and Tri
`Star Metals, LLC
`
`

`
`ATTAGHMENT 1
`ATTACHMENT 1
`
`

`
`U.S. lmports of Stainless Steel Wire from lndia
`Annual 2014 -2015
`
`RAAJRATNA METAL INDUSTRIES
`vrRAJ PROFTLES
`VENUS WIRE INDUSTRIES
`NOT DECLARED
`BEKAERT INDUSTRIES
`SUPERON SCHWEISSTECHNIK
`GARG |NOX
`NEVATIA STEEL & ALLOYS
`PANCHMAHAL STEEL
`MACRO BARS AND WIRES
`HINDUSTAN INOX
`KHK SCAFFOLDING AND FORM WORK
`UNITED CRANE COMPONENTS
`KEI INDUSTRIES
`TEAMGLOBAL LOGISTICS
`B.S. SHAKTISTEEL
`PREMIER INDUSTRIAL
`ANAND ARC
`CONTINENTAL CARBON
`VISHAL MECHANICAL WORKS
`DRAWMET WIRES
`Total
`
`7,238,896
`6,066,204
`4,633,058
`2,196,428
`2,076,427
`1,543,830
`1,250,467
`885,842
`598,787
`326,385
`226,289
`75,242
`70,608
`50,946
`35,907
`10,343
`6,781
`3,085
`2,626
`1,212
`605
`27,299,969
`
`265%
`22.2%
`17,0%
`8.0%
`7,6%
`5]%
`4.6%
`3.2%
`2.2O/O
`
`1.2O/O
`0.8%
`0,3%
`0.3%
`O,2O/O
`0.1%
`O.O4%
`O.O2%
`O.O1%
`O.O1%
`
`O,OO4O/O
`O.OO2%
`100.0%
`
`Source: USCBP AMS (Automated Manifest System)
`
`(retrieved 2-18-16)
`
`Prepared by Georgetown Economic Servrces, LLC
`
`

`
`ATTACHMENT 2
`ATTACHMENT 2
`
`

`
`U.S. lmports of stainless Steel Round W¡re, HTS fl 7223.0010
`Annual 2013 - 2015
`
`Quant¡ty lshort tons)
`20t3
`tt,549
`8,600
`7,433
`2,712
`3,242
`983
`859
`t,214
`347
`637
`664
`656
`t64
`L72
`38
`328
`39,598
`
`usDl
`
`Value
`2013
`36,707,392
`39,73L,441
`23,742,951
`14,310,133
`19,116,998
`t1,77I,O74
`10,275,677
`6,399,407
`92O,3O4
`4,t53,978
`2,437,595
`4,727,130
`7,210,646
`9tO,265
`2L4,266
`2,726,593
`
`Auv (S/short tonl
`20L3
`3,178
`4,620
`3,194
`5,276
`5,897
`11,980
`77,967
`5,270
`2,654
`6,519
`3,662
`7,206
`7,399
`5,28L
`5,713
`8,303
`
`20t4
`14,146
`8,951
`8,381
`2,692
`2,670
`r,120
`1,016
`967
`649
`613
`6t2
`568
`252
`747
`95
`746
`43,O25
`
`20t4
`44,988,338
`42,999,449
`26,779,799
`t4,38I,978
`I6,I49,7L3
`9,956,674
`L1,987,924
`5,025,853
`7,633,745
`4,173,923
`2,t74,2!4
`4,015,040
`2,8LL,504
`923,288
`509,193
`1,197,690
`
`201.4
`3,180
`4,804
`3,195
`5,343
`6,049
`8,889
`17,802
`5,195
`2,517
`6,707
`3,555
`7,068
`L7,739
`6,298
`5,364
`8,784
`
`2015
`74,463
`7,740
`7,739
`1,745
`2,508
`1,568
`770
`T,O4T
`568
`526
`424
`586
`3L2
`55
`651
`492
`41,190
`
`20L5
`4L,352,876
`36,038,447
`23,864,654
`\I,289,242
`13,749,608
`72,583,295
`6,871,174
`4,757,598
`1,550,487
`2,937,t25
`1,413,418
`3,616,655
`3,053,703
`5t2,679
`3,737,026
`7,829,646
`
`20t5
`2,859
`4,656
`3,084
`6,469
`5,482
`8,024
`8,845
`4,563
`2,73L
`5,579
`3,330
`6,176
`9,785
`9,398
`4,818
`3,716
`
`lndia
`Korea
`China
`Canada
`Taiwan
`Germany
`Sweden
`Italy
`United Arab Em
`Switzerland
`Thailand
`Japan
`lreland
`United Kingdom
`Czech Republic
`AII Others
`Total
`
`lndia
`Korea
`China
`Canada
`Ta¡wan
`Germany
`Sweden
`Italy
`United Arab Em
`Switzerland
`Thailand
`Japan
`lreland
`United Kingdom
`Czech Republic
`All Others
`
`lndia
`Korea
`China
`Canada
`Taiwan
`Germany
`Sweden
`Italy
`United Arab Em
`Switzerland
`Thailand
`Japan
`lreland
`United Kingdom
`Czech Republic
`All Others
`
`Source: U.S, Department of Commerce and UslTc
`
`Prepored by Georgetown Economic Services, LLC