Goss Prevails in Antidumping Appeal

By: Jim Rosenberg

A federal appeals court today affirmed a judgment in Goss International’s favor by a U.S. district court in Iowa.

Goss sued two German and two Japanese competitors in 2000 for violation of the 1916 Antidumping Act. Upon failing to have the suit dismissed, all defendants except Tokyo Kikai Seiskusho settled with Goss. Goss won an 11-day jury trial (E&P, Dec. 15, 2003) and was awarded treble damages of more than $31.5 million and attorney fees of almost $3.5 million in May of 2004.

Three judges from the St. Louis-based U.S. Court of Appeals for the Eighth Circuit heard the case while sitting in Cedar Rapids, Iowa, where the suit had been litigated. It’s ruling came after reviewing TKS’s contentions concerning the 1916 Act’s requirement, if any, to show predatory intent, jury instructions on Goss’ claims, the sufficiency of price-erosion evidence, the district court’s exclusion of reputation evidence, and the application of a statute of limitations.

One judge partially dissented, saying that the district court “erred in instructing the jury that ‘intent of injuring’ [a domestic producer] only requires proof of an ‘intent to cause pecuniary loss.” The 1916 Act “requires more than intent to cause pecuniary loss” to a domestic producer. In the market for large newspaper presses, the judge wrote, even legitimate sales probably would cause such loss to competitors.

TKS (U.S.A.) Inc. executives were traveling and unavailable for comment late Monday afternoon. The company’s attorney, Peter J. Toren of New York-based Sidley Austin Brown & Wood said by telephone, “We’re very disappointed with the decision and we disagree with it.”

Concerning possible recourse for TKS, Toren said, “We are considering and analyzing possible avenues we can pursue at this point.” TKS may petition within 14 days for a rehearing of the appeal by the full 8th Circuit and may also, within 30 days, ask the U.S. Supreme Court to consider a review of the case.

Regardless of the decision, Toren said, TKS “remains committed to the United States market … and intends to compete fairly and compete aggressively for business” as well as continue to serve existing customers.

In a statement released shortly after the appellate court’s ruling was published, Goss CEO Bob Brown called it “a positive decision for the overall concept of free trade and fair, rules-based competition, as much as it is a positive for Goss.” The ruling, he continued, “affirmed that a foreign company that deliberately breaks trade laws and then commits fraud in an attempt to hide its illegal actions must be prevented from harming an industry and undermining free trade.”

Toren, however, stated, “The decision is not going to have an effect on foreign manufacturers on a going-forward basis,” because “the anti-dumping statute has been repealed.”

The act that was the basis of the suit was repealed after the World Trade Organization determined that certain of its provisions contravened U.S. treaty obligations. In the absence of suitable modification or repeal of the law, the WTO allowed certain European Union members to enact what would amount to retaliatory legislation.

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