In May, the ITC instituted its investigation of Certain Carbon and Alloy Steel Products, Inv. No. 337-TA-1002, based on alleged violations of Section 337 by the Chinese steel industry, including antitrust, false designation of origin, and trade secret claims. On November 14, however, the presiding administrative law judge (ALJ Lord) granted respondents’ motion to dismiss the antitrust claims for failing to state a claim on which relief could be granted under the statute.
Antitrust-based claims under Section 337 are grounded in Section 337(a)(1)(A), which prohibits “unfair methods of competition and unfair acts in the importation of articles . . . the threat or effect of which is,” inter alia, “to restrain or monopolize trade and commerce in the United States.” 35 U.S.C. § 1337(a)(1)(A)(iii). Relying on the Federal Circuit’s decision in the trade secret-based Section 337 case of Tianrui Group, Inc. v. ITC, 661 F.3d 1322 (Fed. Cir. 2011), ALJ Lord stated that the applicable law under Section 337(a)(1)(A) is federal, namely “the substantive law that governs federal antitrust cases.” The ALJ held that federal law requires antitrust standing and that, under Section 1 of the Sherman Act, a price-fixing scheme, even if proved, must result in predatory pricing for there to be cognizable injury from that unlawful act. The ALJ rejected arguments that the ITC in prior investigations had “looked to interpretations of Section 5 of the Federal Trade Commission Act,” holding that “30-odd years ago” precedent inapplicable because “section 337 as it exists today is an altogether different kind of statute than the FTC Act.” Among other things, the ALJ noted that there is no private right of action for violation of the FTC Act; whereas, according to the ALJ’s reading of Young Engineers, Inc. v. ITC, 721 F.2d 1305, 1315 (Fed. Cir. 1983), Section 337 investigations are more akin to “disputes between private parties.” In that “adversarial setting, the standing requirement that applies in federal antitrust suits ensures that private actions are grounded in harm flowing from anticompetitive practices and do not simply strike at a competitor for the act of competing. Requiring antitrust injury under section 337(a)(l)(A)(iii) therefore is consistent not only with applicable law but with federal antitrust policy.”
The ALJ’s determination is reviewable by the ITC upon petition by the parties or on the Commission’s own motion. By rule, unless reviewed, the determination becomes the determination of the ITC after 30 days.
